Building your own business can be exciting and easy, however, it is not a secret that running it can also be tough. But it is not worth stepping back! Fortunately, preparing for potential problems that you could encounter can help you relieve your worries and help you avoid the mistakes of other new small business owners and entrepreneurs did with their ventures. Although all failure is possible, prevention is always the key. In this article, we are going to share with you the common small business mistakes that you should avoid, to prevent your business from failing.
1. Becoming a jack-of-all-trades
The proprietor becoming a jack-of-all-trades is one of the common small business mistakes that can result in failure. A common difficulty confronting business owners is a lack of time. Running a small business requires you to take on the duties of marketer, sales rep, product development specialist, and finance manager, among others. This typically indicates that we are quickly diverted from one task to another without completing any. To do each job and do it effectively demands true discipline. To avoid this mistake, you need to evaluate your time and effort expenditures. Consider outsourcing some duties if your time would be better spent on your primary business objectives.
John Tian, Co-Founder of Mobitrix
2. Hiring the wrong employees
It’s practically impossible to have a perfect track record when it comes to hiring, so at least some of the people you hire will fail to meet your expectations. Having the right people in place is vital for any company’s success, but it’s especially important for small businesses. Hiring the wrong employee for a business is one of the small business mistakes to be avoided as it might be just as critical and lead to failure.
Consider involving multiple people during the hiring process so that you can get a diversity of viewpoints on potential employees. During interviews, don’t be scared to ask tough questions. An entrepreneur should not only hear a summary of a candidate’s recent, relevant work but also learn how this individual works, how he or she might handle adversity, overcome hurdles and contribute real value to the company.
Matt Weidle, Business Development Manager of Buyer’s Guide
3. Not knowing what to outsource
One of the common small business mistakes is not knowing what to outsource. Many business owners start outsourcing without thoroughly knowing what area they are outsourcing, including the scope of what they need and the best practices related to its execution. My advice for fellow small business owners outsourcing in marketing or any other area is:
- Educate yourself about what you are outsourcing ahead of meeting contractors
- Get in touch with several contractors and pay attention to learn more about their offers and be able to improve your questions.
- Create a detailed list of what you need from the contractor and compile all the relevant information and assets in a folder that you share with them.
Alexandra Pedro, Owner of Alexandra Pedro Marketing
4. Mismanagement of the company’s finances
Profitability is one of the primary reasons for beginning a small business. Unfortunately, many entrepreneurs make financial mistakes early in their careers, making it more difficult to raise cash. Mismanaging the company’s money can lead to a variety of issues, including tax mistakes that result in penalties and fines, monthly cash flow miscalculations, and overpayment for services.
Samuel DeCroes, President of Stock Trend Alerts
5. Lack of planning
Small businesses often do not have a solid business plan in place, leading to them making bad decisions and running into financial trouble. You have to make sure you have a detailed business plan with realistic goals and strategies to avoid this.
Chris Seabrook, Owner at Asguard Locksmiths
6. Failure to engage in online marketing
Failure to engage in online marketing is a typical company misstep to avoid. In one way or another, your small business must be online. For example, you could or might not require a website (many service providers use other homes on the web, such as Facebook, LinkedIn pages, or Etsy shops). Nonetheless, the ever-increasing number of individuals who use the internet to find the products and services they desire must be able to locate and advertise your firm.
Sahil Kakkar the CEO of WebSignals
7. Underspending
Sure, you don’t want to blow out your budget and put yourself in a tight spot. However, you may need to spend money to make money. Don’t limit your potential for success by refusing to put money into areas that matter.
Critical items to spend money on our marketing efforts, equipment necessary for the job, and having the right technology. If you’re not sure where to get the most bang for your buck, work with a financial planner to make sure you’re spending in an area where you’ll see the return.
Becky Usanga, Co-founder of Techy10
8. Hiring salaried employees right after launching
Hiring full-time, salaried employees is one of the small business mistakes that can make a huge strain on cash flow for an early-stage, pre-revenue startup. I’ve seen many small businesses go bankrupt because they hired too many full-time employees too soon. Of course, the goal is to work towards hiring full-time employees, but I recommend only doing so once the business is substantially profitable. Working with part-time employees and contractors when your small business is just getting off the ground is a more flexible and adaptive model that will increase the chance of business success in the early years.
Calloway Cook, President of Illuminate Health
9. Not listening to the customer
Not listening to customers is one of the most common small business mistakes that leads to failure. Customer feedback about the product, price, or practices is very important. More than any other source, 78% of consumers listen to other online consumer opinions. Give your customers a simple and rapid option to communicate with you online, whether your primary marketing activities are online or offline.
*advertisement*
*advertisement*
Chris Nddie, Co-Owner & Marketing Director of ClothingRIC
10. Underestimating the competition
Don’t assume that you don’t have any competition because you’re a small business. There are likely other businesses out there offering the same products or services as you, so be prepared to compete head-on.
Brian Meiggs, Founder of Gigs Done Right
11. Setting an unrealistic goal
Business doesn’t mean overnight success. It takes approx 15-20 years to achieve success. You might become discouraged early on and abandon your dream prematurely if you anticipate being rich overnight. You must remember that success takes perseverance, time, and luck.
Stella Cooper, CEO at PaydayLoansUK
12. Lack of long-term vision
One of the major small business mistakes is the lack of a long-term vision. When entrepreneurs bring a new idea to life, they often don’t look far ahead to the future. Their strategy involves selling as many units in a short period of time to make a financial gain. Then, as consumer preferences start to change, they don’t have a plan in place to adapt and change with the times.
Jeff Johnson of Simple Homebuyers
13. Inability to adapt to market changes
Small businesses that do not upgrade their structure or business model can’t compete with their rivals. Eventually, they fail to meet the ever-evolving needs of their customers and get out of the market.
Sara Graves. Co-founder of USTitleLoans
14. Failure to invest
Several businesses fail because business owners don’t make the proper investments. Essentials like making hires, marketing costs, and websites may seem a bit expensive, but those are the things that keep your business above water and eventually grow your brand. Creating a budget for all of our business expenses and investments should help avoid this mistake.
William Armitage, Co-Founder of BestOdds
15. Uncompetitive pricing
If you’re not selling your products or services at a competitive price, you’re doomed to fail. You need to find the right pricing strategy that allows you to make a profit while still being competitive. This is where in-depth competitor analysis comes into play.
Brian Snedvig, CEO and founder of Jofibo
Takeaways
Running a business can be overwhelming and it can even be more stressful if you do it all alone. Mistakes might don’t stop coming, but the real score is, how you’ll overcome them. Surround yourself with people who are strong where your talents are weakest and keep in mind to avoid the list of small business mistakes mentioned above to help you succeed.Â
Read more from Stealth Agents:
