Starting up a small business? It’s a daunting experience, right? Don’t worry because you’re not alone there. When you are a tradeswoman with an entrepreneurial spirit, you surely will face challenges in the first year of starting up your enterprise. Understanding the most common pitfalls in the process can make the difference between failure or success.
So, if you can’t figure out what to avoid on your fresh path to business growth and prosperity, read on. This post will focus on some of the most frequent mistakes aspiring entrepreneurs make.
Mistake №1: Skipping making a detailed business plan
Planning is everything sometimes. You may not be one for planning your holiday and would rather pack a bag and go but when it comes to running a business, you need a clear strategy from the start. From setting out your short-term targets and assessing your financial resources to putting in use effective practices and standards. Without a formal business plan, you’re likely to lose sight of your direction. Furthermore, lacking a good plan may result in you making the wrong decision about a crucial side of your business. It’s too easy to act on your instincts or rely on some random subjective business cues. Instead, you need to work with hard facts and figures to stay objective and reach your goals.
Mistake №2: Overspending on your initial budget
Another startup mistake that new business owners often do is to spend way too much during the set-up phase of their small business venture. You want the best quality but do you need an expensive sofa for your office or a trendy painting on your wall? Invest where it matters – in good quality supplies and equipment rather than spending on superficial artefacts that make you feel successful and important. Buying a decent computer and good software tools that will help you manage your business makes sense, whereas throwing money on the flashiest business cards is unwise, to say the least.
Mistake №3: Being afraid to invest in key business aspects
Going in completely the opposite direction is not so unpopular, either, or in other words – not spend on anything. You’ve heard that one – no risk, no gain. So, don’t go thrifty on your business investment by getting the cheapest of everything as a way to maintain a positive cash-flow. Getting base materials of dubious quality will result in a sub-standard final product. Or by not investing a fair amount of money on marketing yourself, you may risk not spreading the word about your services as far and loud as you should. So, the trick is to find the right balance between your expenditures and return goals.
Mistake №4: Underestimating your competition
Unless you’ve come up with a unique product that no one else makes, you’re bound to have some direct or indirect competition to think about. Do your research and in a due manner so that you set yourself well ahead of your rivals in the same industry field. Consider the ways on how to differentiate your product or service from that of your local competitors by adding a different type of feature or offering more value, even if it’s not a tangible thing. This is even more valid if you’re operating a small online business, as you’ll be up against other companies within in a wider competitive environment.
Mistake №5: Ignoring the brand’s importance
Your brand should convey what your business is all about. Experts recommend that business owners must invest the time in forging the right message. Your trademark should be able to speak about your business values and principles so that the customer knows why they want to choose you over your competitors. The brand represents your product and the business as a whole. And to build a loyal customer base, you need to create and nurture an emotional connection between the client and what you want them to buy from you.
Mistake №6: Undervaluing your product
Don’t be scared to stand by what you believe in. Or basically, don’t sell your products cheap in an attempt to outrun your competitors or achieve a quick turnover. Selling fast for a low profit will cost you in the long run. You’ll find it much harder to recover from undervaluing your products or services than if you set reasonable and competitive prices from the very beginning. Again, a thorough research of the market is the key to getting things right.
Mistake №7: Employing the wrong people
You may try to save on financial resources and hire inexperienced, underskilled or outright unqualified personnel. After all, they cost less. But don’t go down this path and invest in the right people who have the expertise and professional experience to help you grow your business. Also, it’s a good idea if you personally interview potential candidates because you can, then, evaluate their qualities, attitude and level of motivation first hand. Often, business owners hire skilled staff who are, however, not suited for the job due to personality and behavioural issues.
Mistake №8: Failing to delegate responsibilities
If you attempt to do it all by yourself, you’ll soon find that you’re running out of steam before you’ve even started. Learn to delegate tasks to your team members and benefit from each of your employees’ strengths and competent knowledge. It’s understandable that you want to oversee every process of your business operations but micromanaging your staff can result in a high turnover. Moreover, you’ll have more time to focus on other important aspects of running your business if you get accustomed to assigning more responsibility to your trusted personnel.
Mistake №9: Forgetting about what your client wants
You need to keep your finger on the pulse when it comes to what your customers need and expect from your business. Get to know your client and avoid thinking of them as being an anonymous source of revenue. Also, by understanding your customer’s profile, in terms of age, gender, location and status, you can improve your marketing and customer service efforts. After all, only a happy client is a returning client.
Mistake №10: Disregarding the importance of security
Whether we talk about your business know-how, some sensitive and confidential information or about general operational details of your business processes, you need to put in place some security measures, in order to keep those safe. Always ensure that you have an effective backup system that you can activate to restore lost data during a system crash or because of a human error.
Mistake №11: You’re not learning from your mistakes
Learning from your mistakes as a new business owner is the one thing that can help you go forward. Only entrepreneurs with a positive attitude and resilience to hardship persevere and stay on the road to success. Don’t be afraid to admit your errors and learn to forgive yourself. This way, your judgment and decision-making skills will not be affected by any negative emotions like frustration and self-pity, which may otherwise have a damaging effect on your ability to resolve a difficult business situation.
What can you do?
In conclusion, owners of new independent small businesses often need to rely only on their own abilities. And it’s a matter of confidence and personal qualities to take a gamble and choose to independently run a business. Plan out your venture carefully to stay away from the common pitfalls other small startups often experience.
Alternatively, you can always secure your business future by embarking on the safer path of partnering with a franchising company. This way, you’ll be able to focus on developing and growing your business with a minimum chance of making those widespread mistakes in the process.