7 Mistakes That Small Business Owners Make
Most pieces of advice about anything – from growing a small business to perfecting your running technique – focus on what you can do better. Improve this. Tweak this. Make sure you don’t forget about this thing that should improve with experience.
That’s the right idea – for the most part. But whether you’re building a budding company or running a 5K, there’s one more thing you have to do to succeed:
Avoid potholes.
The problem with inexperience is that you’re likely to come across numerous situations you’ve never dealt with and have to make a difficult snap decision. Worse, you might not even be aware of certain business mistakes until they happen. And these errors can have a range of effects on your business, from slowing clawing away at your gains to outright crippling your company.
To help you avoid potential pitfalls, we’re highlighting seven of the biggest mistakes that small business owners make.
1. Not Having a Business Plan: Most great businesses are built upon a great idea – say, a brilliant invention or a novel way of viewing some sort of service. But an idea is just an idea. You have to build a business around it. It’s easy to get caught up in the excitement of a concept – so much so that they tend to “wing it” and cobble together a business on the fly. Big mistake. You need to write up a business plan, which includes not just your idea, but how you’ll actually monetize it, what expenses you’ll have to absorb, how your business will be structured. Having these ideas laid out ahead of time gives you a tangible, organized goal to work toward, and makes it a lot more likely that you won’t be stumped by some of the basics as you begin to actually build your business.
2. Not Having a Marketing Strategy: Marketing doesn’t come naturally to a lot of entrepreneurs. Even if they know how to sell a product or service to a venture capitalist or angel investor for funding, they likely won’t know the ins and outs of getting the word out to potential customers. But even the best ideas need to be sold – in a consistent way, with a clear, strong message so every potential customer understands quickly what your offering it is and why they need it. Whether you hire marketing staff or an agency, make sure you have someone that’s skilled in putting great products in the best light.
3. Botching pricing: A typical small business mistake is undershooting on price. Many entrepreneurs worry that the only way to compete is by undercutting the competition, but this can backfire in a couple of ways. For one, people are willing to pay for quality, to the point where some consumers actually view an uber-low price not as a deal, but as a signal to expect low quality. Also, if you price yourself too low, you’ll end up losing more and more money even as you gain customers and market share. So avoid undervaluing what you’re selling, and don’t get your customers too accustomed to deep sales, either.
4. Viewing working as more important than managing: When you’re a product developer, it’s easy to let yourself drown in the ins and outs of perfecting your brainchild, or coming up with new iterations and supplemental products. That’s good if you’re just a product developer – but if you’re the owner of a small business, your company will unravel. You have to make sure the other aspects of the business are getting done: manufacturing, accounting, marketing, etc.
5. Doing it all yourself: This is the other side of the coin. Entrepreneurs tend to be brilliant, self-sufficient people who will try to tackle various aspects of the business themselves. The DIY business owner is born out of necessity, but chances are you’re not as skilled at QuickBooks as you are at designing apps. So you need to know when to offload some responsibility.
6. Waiting too long to hire: Overworking yourself by trying to do it all is one of the sure signs that it’s time for your business to start hiring workers. Don’t wait too long. You might be saving money on personnel, or you might think you have things under control … but all small businesses eventually need new blood to grow. Without additional help, you’ll eventually be turning away work and potentially giving yourself a serious health issue.
7. Making the wrong hire: Once you make the decision to start bringing on new employees, you’ll find that small businesses have a few hiring hurdles to clear. As a result, some entrepreneurs tend to take shortcuts. Sometimes they hire friends and family, which is a great way to get imperfect fits and potentially damage otherwise healthy relationships. Sometimes they simply rush the hiring process to get someone – anyone – in the door. But making smart hiring decisions, especially early on, is vital to your small business’s continued existence, so take the time and put the necessary amount of thought into it.
McManamon & Co. has helped numerous small businesses grow their way to great things, and along the way, we’ve also been asked to fix some real horror-story mistakes. That has spurred our experts to think long and hard about all the potential land mines that entrepreneurs face, making our consulting services even more invaluable to our clients.
Don’t let one or two mistakes undermine all your success. Call McManamon & Co. at 440.892.9088 or contact us online today.
Tags: consulting, McManamon, small business | Posted in Consulting, McManamon & Co., small business