New Business Mistake #1 – Not Making a Plan
A business plan is the roadmap for your small business growth and development. If you haven’t laid every single detail in advance, you are going to run into situations where you are winging it. That is a recipe for disaster.
Solution: There are many resources available on the internet to help you if you feel you want to do it yourself. However, you will still have to have someone who knows what they are doing to go over it with you to make sure you have a solid plan. Don’t feel confident writing a business plan yourself? Investing in professional help up front will save you a lot of pain and money down the road. You are a first time small business owner launching in a competitive world. Make sure you set yourself up for success from day one.
New Business Mistake #2 – Choosing the Wrong Business Structure
Are you a sole proprietorship? Co-op? Partnership or corporation? Each has its pros and cons and the one you choose will depend on three factors – liability, taxation and record-keeping. Go into this decision too quickly and you could end up in a world of legal and money issues.
Solution: This is one you definitely want to hand over to the pros. A lawyer and accountant will be able to quickly assess which structure is best for your business and get the ball rolling on the paperwork.
New Business Mistake #3 – No Website
This one may sound like a no-brainer but you might be shocked to learn that according to a recent survey, more than one-third of small businesses do not have a website. 28% of those surveyed also believed that a website was irrelevant to their business needs. That survey was pre-Covid. If there is one thing that we have learned during this pandemic, it is that having an online presence is crucial to your business. It is how you can be discovered, researched and contacted.
Solution: Many business owners think the barrier to entry here is cost. Yes, you can spend thousands and thousands of dollars on a custom-built site but there is a myriad of budget options in this day and age from simple WordPress sites to DIY Wix sites to having your site managed on a platform like the e-commerce one, Shopify. If you don’t have a website, you might as well have a storefront without a door or sign.
New Business Mistake #4 – Not Keeping Accurate Accounting Records
Numbers aren’t everyone’s thing. If you believe your business just needs a great product or look or service to survive, I guarantee you, it will collapse. Your accounting is the backbone of your business and your cash flow is its lifeblood.
Solution: Don’t want to manage the books yourself? Hire an accountant and bookkeeper. I recommend taking some fundamental courses though as it is important that you, as a new business owner, have a basic understanding of your financials. Some knowledge of accounting and QuickBooks will help you understand your business on a deeper level. We cover this in our program to help you monitor your business finances at a glance.
New Business Mistake #5 – Underpricing
Many new business owners think that if they offer lower prices for products or services, they will make themselves more attractive than the competition. This may sound like a great idea but it is one that will come back to bite you right where it hurts – in your cash flow. No matter how much you love what you do, you also have to run your business for a profit. If you are offering something great, customers will come. You shouldn’t have to offer bargain basement prices to attract them.
Solution: Do your research. What are the standard pricing models in your industry at large? What are the standard pricing models in similar businesses where you live? Look at the business plan you worked hard to perfect, figure out how much profit you want to make and price your services and products accordingly.
New Business Mistake #6 – Both Listening to Advice AND Not Listening to Advice
The second you tell anyone your plans, they are going to tell you their stories and give you their advice whether or not they have ever owned a small business. You will also have to sort through the negative comments you get in order to find constructive criticism. How do you know what to listen to and consider vs what is unhelpful?
Solution: Consider the source. Your family and friends may mean well but they might gloss over issues in order to be supportive. Vendors and clients may have more constructive criticism to offer but may not know your business inside out. Hiring a business coach is the best way to go here because they will have your best interests at heart, and they will be able to give you solid advice based on actual business acumen and experience. They will also have a vested interest in understanding all the inner workings of your particular business and your particular industry. You will be able to get the most personalized, professional guidance with a small business coach.
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