You don’t know what you don’t know. As a new small business owner, you’re likely following your intuition and figuring things out as you go, but being proactive and strategic can help your business succeed in the long run.
There are many reasons businesses can fail. Maybe a business owner doesn’t have a clear vision of the problem they’re trying to solve. And even if a company has a viable business model, it could fail because the owner is not pivoting with market demand or economic conditions.
Or maybe the owner loses track of financials and has issues with cash flow or debt. It’s often a combination of factors that contribute to a struggling business.
Although mistakes offer learning opportunities, these are ones to avoid as a new small business owner:
Not having a business plan, budget and pricing strategy
Have a comprehensive plan outlining components like your business’ description, products or services, market research, structure, marketing strategy and financial projections. Business plans are living documents, and you should continuously use yours as a strategic tool to plan for the future and different scenarios your business may face.
Track expenses from the start. Understand where your finances are (and where they are going) as you build your business. What are your financial goals, and what roadmap do you have for getting there? Set SMART (Specific, Measurable, Attainable, Realistic, and Timely) goals and monitor your progress regularly.
Establish a clear pricing strategy to support your market position. Many inexperienced entrepreneurs make the common mistake of underpricing products. Keep in mind that your customers might be willing to pay more for quality or convenience.
Not defining your purpose, target market and marketing strategy
Define the problem you’re solving and your niche. Gather enough data to tell a story about the problem; is it worth solving? Keep your company’s purpose prominent in your mind as you grow.
Build your marketing strategy around your customers, not your products. Who are they, where can you find them, and what do they need? What common values do you share with your customers?
Conduct a competitive analysis. Who is your competition and how are you different? What specific areas are they falling short? The answers can inform your marketing strategy.
Don’t send mixed messages. Communication from your business must be clear and consistent, no matter the channel. A mistake some new entrepreneurs make is not allocating enough money for their marketing budget. When you’re starting your business, consider using free or low-cost tactics like social media posts or ads, email marketing or search engine optimization to bolster your marketing efforts.
Not making continuous projections and adjusting
A big mistake new business owners make is having unrealistically optimistic numbers (as a result of high hopes and a lack of accurate market research). You need to be adaptable and focus on cash flow and profit margins to come to realistic projections for your business.
When owners think they have the best solution to capture market share without proper research or a unique value proposition, they often assume they can sell their products immediately and project higher revenue at year-end.
Taking demand for your products or services into consideration, are you truly addressing a pain point or solving a problem? Are customers willing to pay for your solution?
Not getting help at the right time
Entrepreneurship can feel lonely, and executing multiple roles in your business is challenging.
A common mistake new entrepreneurs make is that they often don’t know when to delegate or outsource jobs within their business. You may be feeling stressed, spending too much time on certain tasks, or need to refocus your time on an area of your business that needs some work. Take stock of your skill set, your business’ needs and what you’re passionate about, and consider outsourcing tasks to an employee or a contractor. You can also consider automation and tools to create more efficiency.
Outsourcing allows business owners to be more strategic and work on their business instead of in it.
Not cultivating your personal life
Devote time to work-life balance to maintain positive mental health and avoid overextending yourself. Burnout is common among entrepreneurs—work proactively to avoid it. Visualize your life holistically, considering a range of categories, such as health, career, friends and fun. What areas of your life need more attention? Do not sacrifice your well-being for your business because both will suffer.
Spark happiness and increase productivity by evaluating your priorities, delegating tasks and doing things you love.
