Starting a small business can be extremely challenging. So many things can go wrong, and when they do, you need to act fast and make the right decision. Of course, you will probably make some mistakes, but most of them are fixable. You just have to be ready.
However, some mistakes could lead you straight to failure. Fortunately, you can prepare for them well in advance and avoid the worst-case scenario. You don’t have to learn from your own example when countless businesses have already been through it all.
By avoiding the following small business mistakes you can’t afford to make, you will embark on the path towards success.
Not Doing Market Research
Before you start your business, you need to see if there’s a market for what you’re selling. No matter how passionate you are about it, other people might not be. If you think your products or services are top-notch, prove it!
You need to test the idea before you invest a lot of money in it. Your passion may blind you, and you may fail to realize that there’s no target audience for your idea. So do proper research because small business mistakes like this one can cost you a small fortune.
Not Knowing Your Target Audience
Once you establish people want to buy what you’re offering, it’s time to understand who your potential customers are. Why do they want to buy? What exactly do they want? How old are they? These are just some questions to answer about your target audience.
Not understanding your target audience is one of the most potentially devastating small business mistakes. You need to know them so that you can cater to their needs and wants. Gathering data on them will help you tailor your marketing strategy and capitalize on it.
Not Having a Detailed Business Plan
One of the worst small business mistakes you could make is not having a solid long-term plan. Writing a business plan can be tedious, but it will save you a lot of time in the long run.
A Harvard Business Review study shows that it absolutely pays to plan. In fact, entrepreneurs with a business plan are 16% more likely to succeed than those without one.
This piece of document is vital for your success. It helps you understand the viability of your business idea as well as pitch it to others, e.g., investors. So it’s especially important if you’re seeking external finance.
Having a Poor (or Nonexistent) Online Presence
You have to be online. Today, everyone is on the internet. So not having a website is one of those fatal small business mistakes you can’t afford to make. This holds true even if you’re a small local shop, for example. According to Fit Small Business, 90% of people look for local businesses online.
Apart from a website, you should also nurture a strong presence on social media. There is no better way to reach a wide audience and build trust in your brand.
Not Investing in Marketing
You can be the best in your line of work and still fail. How so? If you rely on your business to magically attract customers, no one will find out about you. That’s one of the top small business mistakes. So you need to lure them in. You can do that with an effective marketing campaign.
Your website and social media should be an important part of it. However, you can do so much more. For example, you can use email marketing, create limited offers, publish great content, and more. You can even hand out leaflets and go to networking events.
Not Giving Finances Enough Thought
Of all the small business mistakes you can make, not having a solid financial plan is the worst. It will probably take you a couple of years or even more before your business becomes truly profitable. Remember — income doesn’t equal profit.
You need to make sure you have enough money before you even start. You can apply for different kinds of small business financing, such as traditional loans or startup grants. Not being ready in this department can leave you with crippling debt.
Failing to Keep Track of Your Progress
Data is your best friend. Thanks to digital marketing and analytics tools, you can analyze it and gain valuable insight into your progress. There’s strength in knowing how to read your business data and act on it. For example, you can assess the effectiveness of your marketing efforts or see if your new sales technique is working.
One of the costliest small business mistakes is relying on a hunch in decision-making instead of consulting cold, hard data. It can tell you exactly what aspects of your business work and which ones you need to improve on.
Not Having a Contingency Plan
One of the most common small business mistakes is not having a “plan B.” No matter what you’re trying to achieve, you need to have a contingency plan to fall back on. Even if you’re absolutely sure that your sales idea will be a success, you never really know.
Wild market fluctuations happen all the time. Events that are outside of your control can ruin your plans in minutes. You need to expect the unexpected and plan for it, or you might not survive a shortfall.
Trying to Do It All Yourself
If you think you can do it all by yourself, you need to think harder. You can’t juggle marketing, sales, customer service, accounting, and other aspects of a business alongside your core work. No one has that much time and is a pro at each of these things.
So instead of learning accounting from scratch, hire an accountant. Let a professional design your site. Contact a marketing agency to help you design a great campaign. If you don’t want full-time employees, hire contractors. It will pay off in the long run.
These are the small business mistakes you can’t afford to make and ruin your chances of success, so its best to avoid them altogether