Setting up your own small business is hugely rewarding, as well as challenging. Every small-business owner makes mistakes along the way, and this is how you learn and grow – but sometimes a mistake can be crippling for your company. If you want to start your own enterprise, take note of these 7 common business mistakes made by entrepreneurs that can be avoided.
1. Not having a clear purpose
Every business, big or small, needs to know why it exists and what it hopes to achieve. At the beginning of your business-planning process, set time aside to develop a mission and a vision. Once the purpose is clear, it will be the guide for all future decision-making.
2. Not doing enough market research
Doing a survey of friends and family on your business ideas is a good place to start, but many business owners skip doing solid market research to find out if their business is going to succeed. Friends and family will not be enough to support your business going forward, so it’s important to have a clear target market.
3. Miscalculating finance needed
Probably one of the biggest reasons why small businesses fail is lack of money. Cash flow is a vital part of your success and without it your business cannot succeed. Many small-business owners have a difficult time projecting how much money they will make each month. Consult an experienced advisor or successful business owner to accurately calculate how much funding you’ll need.
4. Charging less than they’re worth
It may be tempting to charge less to draw in new business, but if your prices aren’t set at the right amount to make a profit, then the business will suffer as more clients or customers come on board.
5. Doing insufficient or ineffective marketing
While marketing is an additional expense, many small-business owners don’t allocate enough to marketing to their potential customers, or spend their budget without a well-defined strategy in place. The result is that the communication doesn’t reach the right people or generate leads. With a clear idea of the target market, a defined marketing strategy and a realistic but healthy marketing budget, small-business owners can target the right people with the right message.
6. Not moving with change
Markets change very quickly, meaning it’s important for every small-business owner to monitor and anticipate changes before they happen so the company is not left behind.
7. Trying to do it all
When running a small business, it’s tempting for the founder and CEO to want to be involved in all aspects of the business – but you can’t do everything. Many entrepreneurs make the mistake of not hiring the right people and services to provide the necessary support and instead take it all upon themselves. If a business owner is tied up in administration or bookkeeping when they should be out getting new business, it could cause problems in the long run.
The information contained in this article is for information purposes only and does not constitute professional advice.
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