8 BIG Small Business Mistakes
If you're an entrepreneur, there's always a chance that you might be making some BIG mistakes when it comes to running your small business. And while the perks of entrepreneurship are abundant, there is always a risk that mistakes could lead to disaster. That's why we've put together this list of 8 BIG mistakes entrepreneurs commonly make.
1. Ignoring Your Competition
According to Entrepreneur , as of 2012, there are more than 30 million small businesses in the United States alone. In some industries, competition is extremely stiff; for instance, with an estimated 3 million to 5 million nail salons in America alone, it can be quite difficult to stand out from the crowd.
The key takeaway: Make sure you aren't ignoring your competition. Doing so can often lead to a difference between success and failure.
2. Overlooking Technology As of June 2013, 60% of small businesses were using social media sites such as Facebook and Twitter according to Inc . It's easy to get caught up in everyday operations and lose sight of how beneficial technology can be to your small business.
To stay ahead of the curve, make sure that you are constantly keeping up with technological advances. One way of doing so is by hiring a tech expert, or learning how to use various computer applications yourself.
The key takeaway: Don't underestimate the power of technology and the ways it can help your small business stand out from the crowd.
3. Devoting Too Much Time And Money To Marketing According to Entrepreneur , it's absolutely vital that you have a well-developed marketing strategy if you want your small business to thrive in today's competitive environment.
In fact, the majority of small businesses allocate more than 30% of their annual budgets to marketing. However, the key to avoiding BIG mistakes is to make sure you aren't devoting TOO much time and money to market your products and services.
The key takeaway: Devoting too much time and money on marketing can cause your small business to experience a cash flow crunch. That is why it's important to first develop a detailed marketing strategy, and then devise ways in which you can implement that strategy without breaking the bank.
The Bottom Line According to Inc. , the fastest-growing sectors for small businesses are restaurants and hair salons. So, the key to succeeding with your own small business might very well be finding a niche that is in high demand.
The key takeaway: If you choose to start a business that is an offshoot of a product or service you already sell, you could very well enjoy success with your own small business.
4. Forgetting About Managing Your Finances According to Entrepreneur , managing your finances is an extremely important part of running a successful small business. After all, it's often easy to lose track of how much money comes in and what it's being used for.
On top of that, according to Inc , the majority of small businesses fail due to lack of funds. So, the key to avoiding BIG mistakes is to make sure you're staying on top of your finances.
Additionally, as per Entrepreneur , it's also really important to know what types of taxes you'll be paying and how much money you're bringing in. You can find out more about tax issues by visiting the IRS website at irs.gov .
The key takeaway: Don't ignore managing your finances. It's vital for all small businesses, not just startups and young companies that might be growing very quickly.
5. Not Creating A Brand Name
According to Entrepreneur , 27% of small businesses fail within the first year, and this is likely because they can't find a name that evokes a strong positive emotion in the minds of customers.
Therefore, it's really important that you don't make the mistake of forgetting about branding your small business. If you don't have a name yet, here are some tips: - Think up slogans or taglines - Google the words "brand names" - Think up a catchy logo
The key takeaway: The key to branding your small business rests in finding a name that is simple yet memorable. This helps convey what your products/services are about and importantly, aids as inspiration for potential customers.
6. Failing To Think Of Additional Revenue Streams
According to Inc. , the average startup costs $30,000 to $50,000. That is a lot of money required just to get anything off the ground (especially considering that this is only a fraction of what's needed).
Therefore, you need to make sure that you're thinking up as many ways as possible to bring in revenue so that your small business can grow and flourish.
One way of doing so is by holding events once or twice a year where customers can buy your products or services. According to Entrepreneur , this is a great way of bringing in revenue while also creating brand recognition.
Additional revenue streams include advertising, renting out office space, becoming a franchisor, creating magazine and catalogue advertising opportunities, and striking promotional partnerships with other companies.
The key takeaway: Make sure you're thinking of as many potential additional revenue streams as possible. This will go a long way towards ensuring that your small business is financially stable and successful in the eyes of customers.
7. Relying On Your Employees For All The Hard Work It's important that you make sure that your employees are not being neglected because all the hard work is being done by them alone (and it's very simple for that to happen). The responsibility of managing a small business belongs to the owner alone.
Therefore, it's crucial to make sure that you're always aware of their performance and that you give them all the training, feedback, and guidance they need to improve.
As per Inc , 65% of small businesses have at least one employee who claims he or she does all the work on his or her own initiative. The key takeaway is this: If you've hired a skilled employee who is motivated and has great passion for what they do, it's very likely that he/she will keep your small business growing.
The bottom line: Your employees are an essential component of success with your own small business.
Conclusion: Making Small Business Mistakes Is Necessary
None of these mistakes alone is a cause for concern. It's the fact that they all seem to come at once that can really spell trouble for your small business. You may be tempted to think, "If I don't make any BIG mistakes, I'll never achieve anything great." That might be true, but you'll also end up missing opportunities for growth and expansion, and could possibly lose customers. When all is said and done, making small business mistakes is actually a good thing as it allows you to learn from your errors and improve from there on out.