Running a small business is a challenging task.
Turning a business idea into a reality requires utmost dedication and patience. Along the way, there are a few mistakes that almost every budding entrepreneur makes.
This blog post will discuss some of those common small business mistakes, and how to avoid them.
1. Doing Everything Yourself
One of the biggest mistakes many young entrepreneurs make is trying to do everything themselves.
While running a one-person show during the initial stages of a business is understandable, as funds are tight and there may not be enough to pay salaries, it becomes essential to bring in help at one point.
One person can not possibly handle everything at once. If they do, they're bound to make mistakes or miss something which could prove to be detrimental to the startup.
Insight: Our company is no different. For the first few years, the co-founders handled pretty much everything themselves. However, as time passed, they realized they had to hire people. Once they invested in "human capital" (this is a business term), their company began to scale faster.
It's advisable to hire employees, even if it's one person (your mother, grandmother, friend, or anyone!) and delegate tasks to them so you can prioritize your work and apply your attention to where it's most needed.
2. Ignoring Your Cashflow and Profits
According to experts, finance is a priority every entrepreneur should pay attention to at all costs.
Many budding business owners don’t focus or care about their financial plan, which is concerning as it can directly impact the future of your venture.
Starting a business is more than a hobby; it comes with various expenses you must account for, so it's crucial to have a detailed record of everything.
Moreover, every entrepreneur should know how their business performs in the market. They should have precise numbers of their revenues and profits.
3. Spreading Yourself Too Thin
Spreading yourself too thin with tasks and/or products is one of business owners' most common mistakes.
The general rule of thumb is prioritizing one thing at a time instead of multiple items. The same goes for running a small business.
Launching too many products simultaneously, targeting many customers from different demographics, and operating in many different niches are some examples that may seem like they would work but trust us, they don’t.
The list of ways to spread yourself thin is endless. Just be careful and pace yourself. More gets accomplished when you tackle things one at a time and have the resources to handle more.
4. Ignoring Your Target Audience
Aiming to sell your products to everyone is unrealistic. Every business owner must have a defined target audience before moving on to other things.
In today’s consumer-centric world, making a product first and finding an audience is risky and something we wouldn’t recommend.
Need help figuring out where to start? This is where market research plays a significant role. Start by building a customer profile of the ideal customer for your business.
5. Don't Know What You're Selling
You may think we’re exaggerating, but this is true.
Not having a clear understanding of your products, their features, benefits, disadvantages, etc., will negatively impact your sales. This is especially true in businesses with complex products.
You should know your products like the back of your hand so you can answer all questions. This is a powerful way to persuade your customers to buy from you over your competitors.
6. Failing To Protect Your Intellectual Property
Intellectual property refers to anything intangible that’s the result of your ideas. This includes patents and copyrights.
Today’s markets are heavily saturated, and every company is trying to establish itself as the market leader. It’s imperative to protect your intellectual property; for example, copyrights, patents, trademarks, etc.
For more information on this, you should check the IPR laws of your country.
Note: You don't necessarily have to pay for a trademark or copyrights when starting. Intellectual rights start from conception. The main thing you should do is keep records of when you started, any notes you may have, invoices, or anything that can be legally timestamped to show your intellectual property began at X time. This would come in handy in the future if you ever have to contest something.
7. Too Many Giveaways and Contests
Hosting giveaways and contests on social media has picked up momentum in the past few years. While it’s a great way to create awareness of your business and attract new customers, it’s not for everyone.
It depends on the type of products you sell. Giveaways are easier for perishable items and are not heavy on pocket or shipping fees.
Doing giveaways continuously for products customers are currently buying isn't a smart idea, as they're already buying them! Give away something else.
Tip: Have the customer pay for shipping for giveaways. They are getting the product free. You don't have to be on the hook for shipping. Shipping is not a service you provide. Shipping is a fee the customer pays, so they don't have to come and pick up the free product from you. It saves them time and energy.
8. Ignoring The Competition
One of the mistakes entrepreneurs make is not paying attention to their competitors. In any industry, competition from similar businesses is inevitable.
Being unaware of rival businesses has repercussions like losing your market share; they could introduce products/services that could render yours redundant or appeal to the customers more than what you’re currently offering.
Customers are always on the lookout for the best products and reasonable prices. If your competition has managed to offer similar products/services at lesser rates, your customers will switch brands.
9. Not Investing In Marketing
Having a solid marketing plan ready to go is essential for small businesses. After all, you want to spread the word about your brand.
A critical mistake is overlooking marketing during budgeting and devising a business plan. It’s how you find your ideal customers and successfully sell to them.
10. Being Disorganized
Small businesses often have only a handful of employees or just one person, and too much is happening simultaneously.
Keeping everything organized is critical to success in the longer run.
We'd recommend using task management tools to keep track of everything on your to-do list, and it's best to prioritize tasks before starting them. ClickUp is an awesome project management platform!
The Bottom Line
These are some of the most common mistakes entrepreneurs make when running a small business, especially a relatively new one. Of course, as you move, you'll encounter other issues and mistakes that might not be on this list. The key is to have a positive attitude, and be able to overcome challenges without stressing out.
Keep following our blog on more information and tips on starting your business!
