There are many common small business misconceptions, which lead to colossal mistakes. To help out our new entrepreneurs, we have collected the top 5 mistakes small business owners make.
1. Expecting Immediate Success
There is a common misconception among rookie entrepreneurs that their business, once it takes off, will bring the swift and well-deserved financial stability that they have been craving. Success in business, no matter the industry, usually takes more than just hard work. It takes time. The old adage “it takes (insert amount of time here) for the average small business to turn a profit” is suspiciously vague and should not discourage you from starting your own business. It is true, however, that becoming profitable often takes longer than expected. Make sure that you are prepared to live lean for a while in the interest of the success of your business.
2. Don’t Skimp On a Website or Neglect Social Media
One of the most rampant small business mistakes is not having a website. Many small business owners, especially owners of sole-proprietorships do not realize the value of a good website. With people turning to the Internet for information more than any other resource, you may be neglecting a large portion of your potential customers or clients. Investing in a well-designed site that works on all devices, including mobile, is a great investment for you company.
Today’s most successful small businesses are often the ones that are most active in social media. You don’t have to have a well-known, fun, or quirky brand to speak to and stay in touch with your customers and your target audience. Responding to comments, questions, or events pertaining to your business or industry can let people know that you care, and goes a long way in earning customer loyalty and attracting new customers.
Many small business mistakes involve mismanagement of capital. A common theme among small business owners is moving into a physical space before it is necessary. Tying up valuable capital in securing an office space can be a huge mistake. This is especially true in the early stages of a small business, when money is especially tight. This is not to imply that expanding into a space is not a good idea to expand your business when the time is right, however.
If a space is necessary, make sure you to look into all of the options. There can be cost-effective alternatives to traditional office space that allow you to have an office, without tying up a huge amount of capital in the space and its furnishings. Consider a furnished office or a full-service office, which offer shorter lease terms than traditional commercial property. They are often suited for small businesses and startup companies and can eliminate several traditional office expenses like printers, cleaning staff, and furniture.
4. Don’t Go It Alone
Trying to do everything themselves is another one of the most common small business mistakes that many entrepreneurs fall victim to. In the early stages of a small business, getting things started alone makes sense. As business increases, however, many small business owners forego bringing on much needed employees for too long. Hiring people will allow you to delegate tasks and let you focus on the bigger picture of growing your business. It is important to understand that employee wages are investments in your company’s future, not additional costs to you.
5. Spoken Agreements Don’t Cut It
It is very common for small business owners to do business with trusted friends, acquaintances, and family members. All too often, the disagreements within partnerships cause legal issues between friends or family members and end up ruining relationships and dissolving businesses. It is important to have written operating agreements, contracts, and any other legal business documents that pertain to the situation. These documents will outline the rights and responsibilities of everyone involved. An operating agreement should cover how everything within the business will be handled, from decision-making to potential dissolution.
Thank you for reading our list of common mistakes that small business owners make. We hope you can avoid these small business mistakes and continue to pursue your entrepreneurial goals.