How to Avoid These Rookie Business Owner Mistakes
Turning Point HCM is proud to present the following article by Dean Burgess, of Excitepreneur.net. Dean Burgess started Excitepreneur to explore the areas of entrepreneurship that are often overlooked, and share with current and aspiring entrepreneurs the stories and lessons he has learned. He fully believes entrepreneurs will lead us to a more exciting future.
I’m sure you’ve heard that small businesses are the backbone of our country. They provide jobs, stimulate economic growth, and make a significant contribution to our society.
But starting a business isn’t easy, and most entrepreneurs underestimate the amount of time required and work involved in running one.
Here are some of the most common mistakes new small business owners make and how to avoid them.
1) Spending too much time on their product or service instead of on marketing it properly. Marketing doesn’t have to be expensive nowadays. The rise of social media has helped us reach potential customers in every corner of the country or the globe with relative ease and low cost. But if you don’t spend enough time researching your customer, designing your marketing strategy, and executing it, your most perfect product might never reach those looking for it.
2) Not tracking their finances closely enough. You should know how much money you are making and what expenses are going into your company to continue to grow successfully.
Surprisingly, many entrepreneurs who run a successful business have no idea where the funds come from or go in the course of running a profitable enterprise. But it’s not uncommon for those with this knowledge gap to find themselves either bankrupt by year-end or filing incorrect tax returns, often missing potential tax breaks through lack of awareness. And with the right accounting software and processes in place, this is an easy mistake to prevent.
There are also simple steps you can take to secure your bottom line. One recommendation from The Kaplan Group is to avoid extending credit to customers unless you verify their financial status, as well as the climate in which they are operating. A little research can go a long way towards maintaining positive cash flow.
3) Being bad at networking. You should always be looking to connect with people who might not have any idea what you are up to but could need your product or service one day. Or refer you to someone else who does.
And networking doesn’t just help you find potential customers. You can also benefit from the experience of other business owners or industry experts that you can call on in the future for advice.
4) Not being focused enough on customer service. As a small business owner, it’s vitally important to satisfy your customers. You can do this by providing them with friendly and quality service and asking for their feedback. Moment points out that remaining responsive to the inquiries and requests will go a long way towards engaging their faithfulness — and their dollars. So, if you want to make sure that they keep coming back or recommend your services, go above and beyond for them!
5) Not spending enough time researching their industry before jumping in headfirst. Spending more time learning about your industry — especially your direct competition — will help you better understand what it’s really like and what other businesses are out there doing. This can give you a leg up over rival businesses and save you a lot of headaches in the future.
6) Not having the proper business structure from the beginning. It can be challenging to figure out by yourself what suits your business best if you don’t have in-depth knowledge, so if in doubt, check with an industry expert or an attorney to make sure you have the correct company setup from day one.
You can also file online by hiring a service specializing in registering new companies that will have the best advice for you. And if you set up an LLC DIY-style, be sure that you are aware of the legal and filing requirements, as these can change by state.
With these tips, you should avoid the common mistakes that new small business owners make and have a successful start in your entrepreneurial endeavors. So you can focus on what matters, growing your business.