Starting a small business is risky. There are a lot of things that can go wrong, but that doesn’t mean you are destined for failure if you want to make the move into business ownership. If you have a solid business idea that you have thoroughly researched and evaluated, then the risks should drop significantly.
Avoid These 4 Small Business Mistakes
1. Jumping in Without a Plan
Business plans are a must-have when starting a small business. However, it’s important to note that business plans can take different forms. A traditional business plan is generally long, takes extensive research to complete and is necessary in some situations—if you will be applying for a loan or a grant or if you will be pitching your ideas to an investor or potential business partner. If that isn’t the case for you, you can still benefit from creating a simple business plan because it can help guide your business activities on an ongoing basis, transforming into an action plan that helps you identify and achieve your goals.
2. Leaving Your Finances to Someone Else
While it’s a good idea to have professionals on hand to take care of the parts of your business where you may have little experience, it’s also a good idea stay in the loop during this process. This is especially true when it comes to your business finances. You may decide that hiring an accountant and/or a bookkeeper makes sense, but that doesn’t mean you should be hands-off. You need to have a handle on your finances and daily cash flow so you can make smart and realistic decisions in your small business.
3. Starting to Promote Too Soon
Many new business owners are so anxious to start making money that the first step of the launch they focus on is marketing the business. While marketing is integral to the success of your business, you need to make sure you have developed your brand before you create social media accounts, put up a website, or even get business cards printed. If you don’t have a clear understanding of what your business is about, who you’re trying to sell to, and how you will target them, your brand probably doesn’t have much staying power.
4. Overspending (and Underspending)
Some aspiring business owners struggle with figuring how much investment it will take to get the business off the ground. Many either spend way too much on the early stages of the business because they feel like they need top-of-the-line everything to be successful. Others are way too stingy, cutting the wrong corners and costing themselves more in the long run. The goal is to have a solid understanding of the startup costs and ongoing expenses as well as a realistic view of profit potential, then use that information to create a working budget.
The key to being successful when starting a business is taking the time to go through each stage of the startup process. You should also be willing to call in reinforcements when you need them, so creating a support net of family, friends, mentors, and other entrepreneurs is always a great tactic.