When you’re a small business owner and things are going well, it can feel like you can do no wrong. Your business strategy is sound, your employees are all efficient and skilled, and the market is booming – in short, you’ve got it made. You’ll maybe allow yourself a small amount of time to rest on your laurels and admire what you’ve created before you get stuck in, but overall you’re happy with your progress.
It would be a mistake to become complacent, though. Business is a cutthroat environment, and it’s entirely possible to fall behind if you take your eye off the ball for just one second. Many small businesses constantly make fatal mistakes that severely impact their productivity and can, in some cases, cost them their very existence. Here are 5 mistakes small businesses make, and how you can avoid them as a business owner.
Not separating accounts
If you’re embarking on a journey as an entrepreneur or business owner, then keeping your business and personal accounts separate is of paramount importance. You might be tempted to simply merge the two and think “well, my business is kind of my life right now, so I should just keep one account for ease of access”. The thing is, though, it’s hard to get an accurate picture of what your business finances look like when your accounts are similar. You might have just hit a personal windfall, which is great, but that doesn’t reflect on your business. Alternately, you might be looking to draw a personal loan from a a popular lender like this one for your personal finances, and siphoning money from your business isn’t advisable in this circumstance. Trust us – keep your personal and business accounts apart.
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Overenthusiasm – rushing in without planning
Small business owners are an enthusiastic bunch. They’ve just decided their new business venture is going to change the world, so they rush out into the market to make their mark. Without proper planning, though, your business is almost certainly going to fail, because you’re going to come up against challenges you hadn’t anticipated. You should have a thorough business plan which details the operations of your company, as well as a marketing plan complete with a target demographic and ways to engage said demographic. Everything you do as a small business owner should be planned out and mapped to as much of an extent as possible. There will, of course, be moments where this can’t be done, but if you’ve planned for every eventuality then surprises won’t be quite as shocking.
With a strong enough idea under your belt, it’s tempting to believe that business will simply find you and that you don’t need to market yourself. Nothing could be further from the truth. So many businesses go under because they believe so ardently in their product that they fail to remember marketing is crucial. If nobody knows your business exists, then it doesn’t matter how great your product is because nobody will buy it. You need to market yourself, and you need to find the right balance between aggressively putting your product out there and knowing when to back off and let the product speak for itself. There is a fine line, and with experience, you’ll understand it. Until then, err on the side of caution and market, market, market.
Lack of communication
You don’t have to go it alone. If your business has employees, then you need to clue them in and speak to them about problems you’re facing and triumphs you’ve orchestrated. When things are tough, turtling up and not talking about it with anyone is definitely a poor decision, because there could well be someone on your staff who could help that you’re not appealing to. Similarly, if things are great and someone needs a raise or a promotion, if you weren’t there during the tough times then you might not feel like you can be there for your staff during the good times. Businesses only work when the people involved in them collaborate, so make sure you’re talking to the people around you at all times.
Most small businesses zero in on a niche or demographic that isn’t served by other businesses and cater almost exclusively to those people. That’s not to say that you can’t start a business with a more general clientele; if you’ve got a good idea and you know how to implement it, great. For most small businesses, though, a specific demographic should be decided upon before the business is set up. If you don’t define your audience, then it’s impossible to construct marketing campaigns which specifically cater to that audience, and so you’ll see your sales suffer as a result. When you’re laying out your business plan, make sure you specify what your demographic is, as it’ll make your mission statement that much clearer.