Starting a small business is always a risk, and successfully managing one is a tight balancing act. Nothing can prepare business owners for all the challenges they are likely to face. But if you own a business or hope to own one, you can at least avoid some of the most common mistakes made by small businesses, such as not having a business plan, or waiting too long to hire IT professionals.
These won’t always make a venture fail — but they will certainly make the life of everyone involved harder on a daily basis.
1 – Not having a plan
A business plan is the backbone of any new venture. Failing to build concrete business plans is one of the main reasons why so many new businesses fail to make past the first year of their life.
On top of that, businesses that already got their start can’t get away with using the same plan forever. The entire plan needs to be reviewed and updated as the realities of your company chance. The alternative is failing to adapt, which can lead to opportunities being missed, and even cause your entire business to crumble.
2 – Avoiding financing
Very few people can grow a business from the ground up without proper financing. If you own a business or are looking to start one, you’ll likely need to secure financing in the future in order to expand, hire more people, or make expensive but necessary purchases.
The solution, then, is to accept the need for financing, include it as part of your business plan, and start looking into financing options as soon as possible. If you fail to do all that, you’ll be forced to seek financing in a hurry later, which can lead to you being forced to accept an unfavorable deal in order to close the deal quickly.
Working with experienced advisors can help both build a business plan and seek proper financing.
3 – Failing to invest in marketing
Marketing companies don’t always have the best reputation. On top of that, a lot of marketing work appears somewhat simple from the outside, which fools new business owners into thinking they can take care of it on their own. Which is not impossible, but it’s seldom the best solution.
It’s much better to set some budget aside for marketing. Track the return you are getting on every dollar you spend on marketing — a good business plan combined with an effective marketing campaign will allow you to quickly recoup the money you invested.
4 – Not writing everything down
Business agreements should always be put in writing. This isn’t just a matter of trust — even if you believe the person you are working with would never try to fool you, there are still advantages to putting everything in writing. For example, having both parties agree on a written version of the agreement greatly reduces the chances of a misunderstanding.
5 – Trying to work alone
When you build your business around a small team of people you trust, it can be tempting to try and handle everything in-house. However, the world is big and filled with complex problems. If you want your business to keep growing, you’ll need to hire more help and outsource tasks eventually. Doing so sooner rather than later can prevent many headaches.
One area of your business you may want to outsource is your IT needs. There are plenty of industry veterans offering that type of service.