The Common Mistakes Business Owners Make
The Common Mistakes Business Owners Make
Thinking of starting a business? It’s always important to understand the common mistakes small business owners are prone to when they first get up and running. There is no one-size-fits-all solution for starting a business, and the pressure to succeed can lead to poor decisions. But you can equip yourself with the knowledge of what countless entrepreneurs before you have learned. Here, we’ll discuss the most frequent mistakes business owners make so you can learn how to avoid them in the first place.
- Improper Planning
In our post about restaurant startup costs, we stressed the importance of a fine-tuned business plan. Not only will this provide the roadmap for your business, but it’s also what investors are going to be looking at when deciding if you’re a good candidate for a small business loan.
- Undervaluing Your Goods
Many small business owners have a tendency to value their business, goods, and services at below their fair value. Whether this be due to a lack of confidence or fear of failure, it’s an uphill battle to recover from under-pricing. Do your research beforehand to determine the best price for your goods so you’re not falling short when it comes to revenue.
- Lack of Digital Presence
With this we’re not just talking about a website (which is practically a necessity for all businesses big and small today). Your business needs to be active on as many social platforms as possible, such as Facebook, Twitter, and Instagram. Social media marketing is a smart, inexpensive move. It’s also expected by 93% of Americans according to a study. So be sure you’re ready to post in the lead-up to your opening to drive awareness and excitement. Once you’ve opened, use your digital presence to advertise promotions, special events, and more.
- Not Spending Smartly
New business owners may have the urge to splurge on high-end items that might not be needed, or skimp on the things they should be investing more in. You need to strike the proper balance for spending depending on what your business is selling. Restaurants should spend more on higher quality equipment, while a retail establishment might not want to pinch pennies on a POS system. In any event, creating a smart budget—and sticking to it—will help you keep your finances on track.
- Not Prioritizing Customer Service
Regardless of your business, great customer service is always your #1 product. Your focus always needs to be on making sure your customers are happy, so it’s critical to respond to all feedback you get (especially the negative stuff) and work to make certain your guests are always happy. We’ve all had poor customer service experiences. Sometimes, it only takes one bad instance to turn us off a company forever.
- Lack of Backup
Save save save. Your business is likely all contained in one digital format or another. What happens if something crashes? Back up all of your files on a regular basis to reduce the risk of losing everything. And while you’re at it, you need to make sure sensitive information such as employee data and financial records is kept in a secure location. That can either be a safe, or a password-protected personal file. But certainly never anywhere that can be hacked or publicly accessed.
- Shared Accounts
This one is a nod to the old saying “never mix business with pleasure.” As a new business owner, you should keep your personal finances separate from your business by maintaining individual checking and savings accounts for each. Not only does this make tax estimating and budgeting more convenient, it also serves to deliver a more accurate view of your business’ financial health. Another positive to this strategy is that should your business experience a downturn, your personal credit score won’t be affected.
These are just a few of the most common mistakes a startup can make. With proper research, planning, and attention, you can avoid these mishaps in your business and enjoy the satisfaction of being a successful entrepreneur.