Everyone needs to start a business. Money is scarce and finding a way to earn an extra dime saves one a lot. For this reason, people are making common mistakes of small businesses. Yes, the goal is to earn but; that shouldn’t be the only goal.
The customer is the foundation of any business, finding a way to keep them will help you be successful. We all want to make it, however, as we try we should consider avoiding some common mistakes that cost the business.
Before diving into the mistakes of small businesses let’s get some facts right.
What defines a small business?
It is a privately owned entity(corporations, partnerships, or sole proprietorships) that has few employees and has a low revenue than an established enterprise.
It operates with few employees however, it can be marketed to reach a wide range of people. Just like any business, it should be registered. Registration helps the business be recognized by law and makes it easy to pay taxes.
A registered business also saves the owner from legal claims. It also ensures personal assets are not affected by the business.
How to start a small business?
Well, before starting any business one needs to have a plan. A plan is not enough, one needs to have passion and dedication.
Here is how to:
1 Find the right name- the name is what sells the business. A good name should be informative and unique.
2. Find funds- these are the driving force for any business. One can choose to find investors, borrow a loan or use personal savings.
3. Have a business plan- this is the strategy to use to run and implement new products and services.
4. Have a web presence- this is the best way to ensure you reach out to many people. At OLITT creating a website is FREE! Besides, it has a lot to offer from security to branding, free hosting, and many more.
5. Find the right team- they will be responsible for products and service delivery to the clients. Hire the right team.
Here is the complete guide on what to do when starting a business.
Pros and Cons of small businesses
This means having the freedom to make decisions. Choosing who and when to transact with for the business.
Also, one decides on when to work and how much to pay. Besides, it’s easy to choose when to take a break.
Most entrepreneurs outway the risks by the freedom they get in owning a business.
- Financial growth
Of course, any business is profitable. Small businesses also gain a reputable lump sum when well maintained.
One has a choice of reinvesting or keeping the profits to themselves. Besides, the money isn’t chopped as in the case of working for other organizations.
The rewards are great as compared to working for another entity or other individuals where they deduct some payments.
Having a business means you create opportunities for others. Such opportunities can be in the form of money, loans, and many others.
Also as an entrepreneur, you are open to choosing what opportunity best fits your business growth.
It enables one to be involved in all the business plans. It enables one to feel a sense of ownership and create something of your own.
Besides, since you have control, it’s easy to change how the business operates and what to and not to implement.
With all the knowledge and skill comes uncertainty. Today the business might run smoothly but come tomorrow the market is inflated.
It’s not an easy task running the business. It’s hard to anticipate the market world because changes occur at any time.
Time becomes an issue when running your own business. As you have freedom at times one may choose not to open up.
It can be a hard time especially when you run the business alone and you are responsible for everything.
The Common Mistakes of Small Businesses
Here are the common mistakes of small businesses proprietors make when running the business.
1. Putting product first, customers last!
There is a saying “the customer is always right!”; the customer is indeed the foundation for every business.
Without the customer, the products will not sell. Have a way to keep the customer coming back for more.
Customer retention is an art. Treat them right and also offer to provide after-sale services like transport.
The customer is always more important than the product. Put the customer first then the product follows.
2. Trying to do it all
Yes, starting up there is no need for hiring. However, as the business grows one needs help. It’s hard to do it all.
One needs the people to manage the stock, book records, hiring, and many others. It’s important to provide opportunities for others.
Find a way to have the right team to help you. Besides, the right team will reduce workload and improve production.
3. Mistiming launch
Before launching or expanding, it’s important to have the right timing. Mistiming will cost your business.
Research is key, it helps one to know when and where to start. Research also helps one plan ahead.
Always find the right time and don’t hurry the process. Timing is crucial.
4. An assumption on no competition
Every business has its competitors, doesn’t matter it’s small or large. Assumptions ruin all your plans.
It’s crucial to consider the competition. Know where you can better and offer what your competitors are not offering.
Competitors are good, they help one know where to focus their resources.
5. Cutting prices
It’s a great strategy to use. However, it’s important to know when to use it. Don’t cut prices to gain customers then later raise it. You might lose more customers than you even gained.
It’s important to learn the inflation curve.
6. No book-keeping
Keeping good records is important. Books show how the business is performing. Of course, it is a hard task, especially without the right person.
The financials are a driving force for the business. They help one plan ahead and also build the business.
The books need to be kept straight for it also helps in the filing of taxes.
7. No marketing strategy
Through marketing, you increase reach. Many people can know more about your business.
One however needs a good plan to implement marketing. This will help you understand the needs of the customer. Which is crucial for you will always provide what they need.
8. Trying to get rich fast
Yes, some people start a business to get rich. They forget one just doesn’t get rich overnight. One has to put input into the business.
Success is a process and can’t be gained without work. It’s only in the dictionary where success comes before work!
Get the right input and run your business, success will eventually catch up.
9. Wrong hiring choices
Hurrying and just getting people because of the rates will cost the business. These people hired will be responsible for transacting with the clients.
Don’t hire because you need help, have a way to evaluate your candidates before making them part of your team.
The right team will always build trust and credibility. Also, they will boost the business and ensure it grows.
10. Not setting attainable goals
Goals are important. They show what you want to achieve. As a small business, it’s important to start with weekly targets.
Don’t create a 5-years target yet you have just started. Start small and build to large targets as the business grows.
Set attainable goals; they don’t have to be huge but should make sense to you.
11. Always business
Yes, it’s your business but that doesn’t mean every time is business time. It’s important to take time off.
Rest helps the body recover, also helps one think clearly. Find time to spend with friends and family as you relax.
The above are 11 common mistakes of small businesses make. Avoiding such mistakes saves one the hassle and cost.
Businesses need to be cared for, besides they are investments and from them, one can build or incur losses.
Also, remember to read these insights of a small business.