After a long road, you are finally here. You’ve opened a new shop, set up your website, or started to promote your services or products on social media.
But will you be successful? In fact, will you even make it past your first year?
Make no mistake, the business world is one of the most cutthroat out there, and with 20% of small businesses failing in their first year and 50% not making it to year 5, success is not guaranteed.
Often the difference between a small business owner riding high or struggling to stay open comes down to them avoiding 8 common mistakes when starting a business.
What are these, and what can you do to make sure that this doesn’t happen to you? Keep reading to find out.
Although you may have spent hours thinking about your new business, it is vital as a small business owner to avoid falling into the trap of starting your business without a clear idea of where you want to take it and how you plan to get it there.
Clarifying your budget, running costs, expectations for the first few months and years, etc. are all basic elements of a fail-safe business plan. If you do this before you get started, you will have the reassurance of knowing not only how to reach your goals, but if you can reach them in the first place.
Marketing isn’t just confined to large corporations and blue-chip companies. Even if you are selling cupcakes from a village bakery or t-shirts on Instagram, if you don’t know who you are selling to and how to get their attention, your business is on a ticking clock to failure.
Who requires your product or service? Where do they live? Do they use social media and if so which platforms? How much would they be willing to spend?
All of these questions need to be answered if you are a small business owner, and finding the answers now is easier than ever, so there is no excuse.
Can you imagine yourself lining up for a race in Formula 1 today, with the car that won the championship 10 or 20 years ago?
Although the technology may have been state of the art then, it is outdated now. Yet so many new business owners, whether it be due to finances or a lack of awareness, make the mistake of not investing time and money into new technologies that could help advance their business.
Try to embrace whatever advances are available to you, whether it comes in the form of software or hardware to improve how your business operates or how it sells. This way you won’t fall behind before you have even started.
Every team, no matter how small needs to have a clear understanding about who is responsible for doing what and when they will do it if they want to be successful.
Having a poor organizational structure can lead to problems such as poor communication, reduced productivity, and lost revenue.
You can prevent this by having defined procedures and systems. Use organizational software so everyone can access the latest information, scheduling, and tasks so there is no confusion about who is responsible for following through on deliverables.
Everything from logos to promotional videos connected to your company could be copied and stolen for someone else’s profit. If that person competes in the same sector as you then they could start eating into your sales and negatively effecting your profits.
Not paying attention to this is one of the most common mistakes when starting a business, so don’t fall foul and protect your intellectual property.
As a consequence of a poor business plan, a small business owner may find themselves regularly having to adapt to the rigors of the unforeseen. The problem with this is that more often than not, it involves spending money unnecessarily.
Everything from hiring too many staff members, overspending on your operating costs, or subscribing to too many services that are meant to “help” your business can leave you with empty pockets sooner than you think.
Every small business owner should aim to have tight bookkeeping practices in place to avoid these cash flow problems before they happen.
Starting a new business can be daunting especially if you have no previous experience in the industry. To counter this and also to entice new customers, the most common way most new entrepreneurs compete is to undercut the competition.
Don’t be fooled, this is the biggest mistake a small business owner can make if they want to be profitable long-term.
Conduct proper research and find out exactly what you should be charging for your products or services. You deserve to get paid fairly for the work that you do and keeping prices lower than necessary only creates unrealistic expectations from customers that will look elsewhere when the inevitable happens, raising your prices further down the line.
Your ideas are what have to lead you to be in the position to start a small business. For that reason, it is easy to find yourself becoming judge, jury, and executioner over all aspects of your business.
While this sense of control may bring you peace of mind in the short term, it will burn you out in the long run.
Bring in competent people you trust and don’t be afraid to delegate. Doing so will allow you to rely on people that have more expertise in areas you don’t and give you more time to focus on the areas of your business that need the most attention.
Knowing if you are on the highway to success rather than the road to failure may seem like a mystery when starting your business journey.
But after looking at our common business mistakes one thing is clear: You are more in control of your destiny than you think! So take control of your future and apply the tips.