Whether you are starting a new Online Business, a Brick and Mortar Business, or a Service Based – there is no amount of preparation that is going to gear you properly for your new adventure. Mistakes that small businesses make can hinder their progress.
New ventures are very exciting, but they are also fraught with mistakes, mishaps and even missteps. You may be well prepared to set up your new business. You may have spent countless nights conjuring your eventual success. But at some point, problems do happen.
So how do you identify the probable potholes and stumbling blocks that you will invariably come across? For starters a quick key to your success is to realize when you make mistakes – you use them as your learning curve and avoid making them all over again? Find out what common mistakes small businesses make are.
Here are the 10 Common Mistakes that Small Businesses Make
1. Being a Jack of all Trades and Master of None
One of the commonest mistakes small businesses make is that they really believe that can do it all! This can happen either because they are not calculating the magnitude of the work involved in setting up a business – or because they are scrimping and trying to cut corners.
Whilst most entrepreneurs can in fact do it all – because usually they are quite talented – they end up doing it all with mediocrity.
Tip: Focus on what you are good at – excel at it – and let others who have stronger skills than you – do what they are good at for you.
2. Having No Clear Goals – Not Knowing Where you are Heading
If you have a busines with no direction – it is similar to you driving without a destination. When you set goals for your company, you are making it clear to yourself and to everyone involved what the purpose of your project is, and where you want to head.
When you have a target to reach that is concrete and clear and with a time-line – you are able to measure your progress. Without definition and without the urgency of a timeline you will run your business like a headless chicken. This is definetely one of the hugest mistakes small businesses make.
Tip: Set realistic goals that are attainable also time based. Unrealistic goals can hurt both your credibility as well as become an emotional drain.
3. Assuming that You Have No Competition
When it comes to most common mistakes small businesses make it is also assuming that they have zero competition. Even if you have just invented the most innovative App which the world has never seen – never assume that you do not have rivals and competitors. Competition does not have to be obvious. It can come from many other possible alternatives. It could be as simple as what are clients potentially using instead of your product? As we all know the power is always in the hands of the client. They can buy or they can walk away. That alone is a threat.
Another common mistake is that you believe in your product so much that you naturally assume that everyone is going to want it. You need to test out your market and gauge its reaction.
The test to make this clear is the example of Dean Kamen and his Segway Invention. Kamen was sure that Segway would revolutionize the way we commute. He sold on his idea to huge investors. Segway – one of the most hyped invention has ended production in 2020. No matter how good you think your idea is – it is the market that will dictate whether it is what it wants.
Tip: Remember that people buy what they want and not what they need. Sell them what they want but give them what they need.
4. Having a Messed-Up Marketing Plan – Or No Marketing Plan
Part of having a good business plan should always include having a great marketing plan. You just never know how, where or when your potential client is going to hear about your business.
Your marketing is the message that you want to send out there in that huge space about your being the best in your niche. Therefore, your message must be clear and consistent. This is why building your brand is what really matters.
Tip: Remember you will never have a chance to make a second impression. It is first impressions that matter and as such you cannot send out mixed message.
5. Slashing Prices to beat Competition
Common mistakes small businesses make include… slashing prices! When you slash prices to beat your competition it is as if you are cutting your nose to spite your face. If you think that cheaper prices are going to attract more clients – you are wrong!
Customers are willing to spend a little bit more if they know that they are getting good value for their money with quality and service thrown in.
Slashing prices is a very dangerous game, especially if you do not have a strong understanding of your profits and your margins. It could mean that you will be slashing your salary and your employees at any point to keep the costs down.
Give your work the right value. Check what the competition is doing and stay one step ahead.
Tip: Stop slashing your prices and instead start connecting with your customers.
6. Getting into Bed with the Wrong Partners
Business partnerships are great and necessary because they allow entrepreneurs to pool in skills, share costs and share risks together.
However, getting into bed with the wrong partner is very similar to being in a bad marriage. Many marriages like many partners start off with a celebration and a honeymoon. But once the honeymoon period is over – the stark reality will set in.
Partnerships with friends and family are the biggest “risk exposure”. It is very attractive to start family business because you believe that you are working towards a common goal and that friends and family are people you can trust.
But when you put money into the equation – everything can change. Recurrent issues will keep coming up. Personality differences in how you resolve problems will keep showing up and whilst you can fix a marriage in bed most of the time – this is where the bed is not in sight. More often than not, you will be cutting you tongue to do less damage but in the end it will be cutting your nose to spite your face.
Business partnerships should be based on the basis of Yin and Yan. What one does the other one cannot – therefore it is based on complimentary skills rather than similar skills which may end up being competing skills.
Tip: Remember to have an equitable exit clause. Start the marriage as you intend to live it. And try not to mix business and pleasure.
7. Being All Business and No Pleasure
It is quite normal to be excited about your business when you are starting out. But a lot of new entrepreneurs put their personal lives on hold in order to give their business their full attention.
Ultimately, there is a great chance that both your business and your personal life may end up suffering.
Remember that even athletes need to get days of rest from severe and punishing training. The body and the mind need to rest because otherwise you will not see the wood for the trees. Do not get lost in doing ”busy stuff” because it feels like you are working better.
The role of a real entrepreneur is to find the time to be creative and find ways to grow the business.
Tip: Most of the times when you take yourself out of the equation for a brief time – you get better perspective of your business.
8. Setting Yourself Up to Success Only
There is nothing better than to dream with eyes wide open. If all business plans came true, then becoming the next Bill Gates would be nothing out of this world.
Many new entrepreneurs go into business thinking that they will hit the golden goose immediately and making unrealistic returns and wild successes.
If you don’t plan to encounter roadblocks you will not be able to cope with them when you actually hit on them. Therefore, although priming your mind with clear objectives is essential in business – so is the very real possibility of hitting on problems.
Tip: Keep the possibility of failure in focus so that you grow the strength to overcome it.
9. Better No Leader than a Weak Leader
Whether your business will be a success or not depends entirely on how strong and effective you are as a leader. Mind you this does not mean that as a leader you should be authoritarian but it means that you need to be recognized as the one who gives directions. As a leader you need to inspire, motivate and empower.
If you are a procrastinator and “one of the boys” – when the time comes to implement your decisions, you are running a big risk of being totally overlooked.
Tip: Share your vision and lead by example. Demonstrate integrity but do not be afraid to make hard decisions.
10. Having a Get Rich Quick Type of Mentality
The quickest way to see a business disaster is to go into business expecting overnight success. This is why 85% of new businesses are doomed to fail in the first two years of their existence.
If you go into a business expecting to rake profits immediately – the chances of getting demoralized and discouraged are very high.
Success takes time and hard work. For a business to become successful perseverance and also a little bit of luck have to be both present. Hitting the Jackpot happens only in Las Vegas. The rest is focus and work.
Tip: If your business has not scaled and has been stagnant for a long time – perhaps it is time to try something new.
Why You Need to Model Your New Business – And Prime it For Success
Even the world was built in seven days. There is therefore no such thing as a one fits all formula for success. However, successful businesses are structured on the foundations of common principles. When you are in doubt on any area of your business, model your business on similar businesses that have a great track record. Do not try to re-invent the wheel.
These were the most common mistakes small businesses make. Have you ever found yourself doing any of these? Let us know in the comments what lesson you learnt from your mistakes!