“Continuous learning is the minimum requirement for success in any field.” – Dennis Waitle
Starting a business isn’t always easy. There are so many things to think about and decisions to make; the pressure can cause you to make a poor decision that can hurt your potential for success, or at least set you back.
While there isn’t a fool-proof plan to reach small business startup success, there are several common and dangerous mistakes many new business owners make that can negatively impact their businesses.
Here are 10 of the most common mistakes to avoid as you start your small business.
1. Skipping the Planning Phase
The saying goes: “When you fail to plan, you’re planning to fail”. Planning may be tedious, but without a solid plan for your business that includes business idea researchand market potential, you will be operating in the dark. The most important plans to consider include a business plan, a financial plan, and a marketing plan. Without these to guide your startup and growth, you’ll struggle to make decisions, get loans, or bring investors on board.
2. Not Setting SMART Goals
Goals can give you direction when you first start your business, then keep you on track during the day-to-day operations. By making sure your goals are SMART goals, you can identify where you want to go and outline specific steps that you will take to get there. SMART is an acronym for the 5 elements of specific, measurable, achievable, relevant, and time-based goals. It’s a simple tool used by businesses to go beyond the realm of fuzzy goal-setting into an actionable plan for results.
3. Not Understanding The Pricing Matrix
Many times, lack of confidence in our ability and fear of failure causes us to under-price our products and services. This is a dangerous path to take because it undermines the unique value you bring to the table and opens up the possibility of resentment and frustration. Recovering from undervaluing your goods is a long road, so you should explore the market thoroughly as you start your business to identify the best price entry point for what you’re selling. Overpricing as well is bad for your business, so be sure to find your sweet spot.
4. Being Afraid of Marketing
Marketing can take many forms from word of mouth referrals, to traditional advertising, to Internet marketing. There aren’t any set rules when it comes to marketing; the best type of marketing for you depends on your business and your target audience. The mistake is assuming you don’t need to market and that business will come to you.
Remember, marketing is an investment, not an expense. Depending on your industry, goals, and stage in business, the percentage of revenues you spend on marketing may vary from 2% to 20%. Research benchmarks for your industry, and be willing to invest. Plus, you can start by utilising free or nearly free options, such as networking, social media, and SEO, and ramping up as your business grows.
5. Not Knowing Who Your Ideal Customer Is
One vital part of any successful marketing campaign is understanding who your ideal customer is. It’s not enough to create a marketing budget and try a little bit of everything. You need to do market research to identify who you are trying to reach, where you can find them and how they will react to your marketing activities. Find a middle ground: a target market small enough to capture, but large enough to generate a reasonable profit. You’ll often hear that “niche is nice”. However, a too specific market can be just as problematic as a market that’s too wide.
6. Doing It All Alone
A small business owner may be willing to learn how to be a jack of all trades, but it doesn’t have to be that way. Effective delegation can be one of the best ways for new small business owners to build their businesses, free up their time for business activities that require their unique expertise, and build a team positioned for future success. A lone wolf can only stand for a while.
7. Building The Wrong Team
An equally expensive mistake, as we’ve just mentioned, is hiring too quickly, such that you hire the wrong team. Hiring the wrong team will not only cost you money, but it’ll start your business off on the wrong foot and hurt overall morale.
Hire carefully and thoughtfully. Go through an interviewing process with everyone—even if you’ve worked with the person before or the candidate is a friend. Also, before you hire someone just based on skill, take a moment to evaluate whether or not this candidate is a culture fit. Teams work best when everyone working together gets along.
8. Not listening to advice
It’s great that you’re passionate about your idea—and sometimes, you need to ignore the naysayers to realise your dream. However, some zealous business owners fall trap to dismissing any constructive criticism or advice they receive, which can lead you to miss the opportunity to address possible issues before they happen.
Figure out how to sort through truly negative comments and constructive criticism. If someone is offering you genuine advice, consider stopping and listening carefully. Impartial sources like potential customers, staff or mentors are more likely to be honest with you than family and friends. Pay particular attention to what they say and you can avoid making some serious mistakes with your small business.
9. Not putting agreements in writing
When you land a new client or partnership, you may be so excited that you jump right into getting started and neglect to iron out all the details. This is one of the common small business mistakes that can cause huge problems—up to and including lawsuits—if something goes wrong or a misunderstanding arises.
To avoid this issue, always insist on a written contract before providing a service or product or entering a business relationship. Use templates at websites such as Rocket Lawyer to draft contracts for common situations your business faces, and then have an attorney review them.
10. Not Making a Commitment
Starting a business requires a number of success-oriented character traits such as drive, dedication and a serious sense of commitment. Small business owners need to be willing to make sacrifices. Put in the time necessary, and face challenges head-on if they want their businesses to be successful.
We all make mistakes. The key is being aware of them and consistently working to make smart, well-informed decisions in your business. If you can do that, and remain resilient when you do make a mistake, success will be within your reach.
In the end, although we’ve discussed the most common mistakes startups make, you shouldn’t be afraid to make mistakes. Instead, you should be afraid of making mistakes that could have easily been avoided. Starting and managing a business is not an easy process. Therefore, you’ll want to try and save yourself any time and hassle when you can.
One of the best ways to do this, once again, is to learn from others. Exploring the mistakes they’ve made, considering how they might apply to your business, and what you can do to avoid them. Then, once you’re a seasoned and experienced business owner, you can help those just starting out by providing your insight and talking to them about the mistakes you did make, and how they can learn from you to help their business grow and succeed.
At #teamknowyourpurpose we love and champion the little guy, so we are rooting for you. Let us know in the comments section how you are going with your startup.
As always, hope you and yours are keeping safe. Remember, there’s something so strong inside you.