According to the Bureau of Labor and Statistics, more than one-fifth of small businesses fail within their first year, while nearly half make it to the first five years. One-third of small businesses last 10 years, and roughly one-quarter are able to prosper for 15 years.
These findings tell us one thing: Running a successful business for over a year or two is extremely difficult. Mind you, even the most competent of entrepreneurs barely make it long-term.
Whether you’re just about to start a small business, or you’ve been managing one for nearly a decade already, there will always be pitfalls along the way. That’s not a reason to give up.
Thousands of entrepreneurs have made mistakes that you can learn from. Understanding these common human errors makes it easier for you to avoid them later on. And, by being able to dodge them, you get to save your business in the long run.
With that being said, let’s take a closer look at seven mistakes small business owners continue to commit again and again. Of course, we’ll be including solutions for each. That way, you’ll know exactly what to do to evade failure before it can even step foot on your business.
1. Not Setting Measurable Goals
Setting goals is always the first step in starting a business.
Unfortunately, many new entrepreneurs don’t realize that the goals they’re creating are far from being attainable. Despite being able to list down a lot of promising business goals, they’re unable to objectively evaluate whether they’ve achieved those goals or not.
Why might that be?
Well, our gut tells us that they’re not setting metric-based goals. This normally happens because translating big-picture objectives into measurable goals can be quite a challenge.
If your goals aren’t driven by metrics, you’ll never know if you’ve succeeded or not.
Make sure that all your goals in your business plan are measurable. See to it that you can gauge each of them with cold, hard data.
By having such goals, you’ll be able to identify where you want to go and how you’ll get there. In other words, you’ll make it possible for your business achieve its strategic objectives.
2. Poor Budgeting
Poor budgeting, whether it’s overspending or underspending, is one of the most dangerous drawbacks in running a small business.
A new business owner has been spending a fortune to buy the best of the best, from equipment and software to marketing campaigns. Then there’s another one who refuses to spend money on anything.
Although both have different spending tactics, they have one thing in common: They’re setting themselves up for failure.
Create a business budget and stick to it. It’s not just a single budget we’re talking about here. Each department should have an allotted budget.
Have a clear understanding of what your business really needs. No need to waste big bucks on something just because you think it can give you a good ROI.
3. Marketing the Wrong Way
Many small business owners tend to ignore marketing, while others are not utilizing it correctly. Don’t be like them.
All too often, entrepreneurs, especially those who are fresh to the scene, end up sending the wrong message to the wrong people. No matter how powerful or attractive an ad appears, or how much money they had to invest, it’s pretty much worthless if it’s targeted to an audience that’s not interested in their offers.
Sure, you can come up with a unique and compelling campaign, but what’s the point if it doesn’t reach the right people? Or, what if you do reach them, only for them to find your message a bit confusing?
What’s even worse is doing zero marketing. Without a doubt, your business will flop if that’s the case. How will you get the word out about your brainchild? You can always ask an internet marketing miami company to help you with your goals.
First, think about your audience. Who are your primary customers? Are you 101% sure that you’re marketing to the right people?
It might be a good idea to conduct a little customer research first. Doing so helps you tailor your marketing and develop sales tactics for your target audience based on reliable information.
Once you have your answers, you may start making your brand message. It should be crystal clear, straightforward, and appeal to your prospective customers.
4. Unfulfilled Promises
Another common mistake many entrepreneurs are guilty of making is overpromising.
When things are going exceptionally well and you’re all fired up, it’s easy to promise your customers the stars and the moon. That’s the moment you just messed up.
Let’s say you’re a small game company. Out of excitement, you make an announcement on social media that you’re releasing a new interactive video game, with tons of exciting features – features that no other brands have offered.
It finally comes out, avid gamers rush to take it home, and just like that, their enthusiasm turns into total disappointment. Why? They saw none of the features you promised.
Will they be coming back to buy your products next time? Perhaps that can only be wishful thinking already.
Keep your promises as realistic as possible. If you have a feeling that you won’t be able to deliver, don’t promise it.
5. Doing Everything Alone
Small business owners are super passionate, self-driven, motivated, and are always willing to put in hours and hours of hard work – and we truly commend them for that.
While these traits are ingredients of a successful business, they can also spell trouble once your business starts to boom. You can definitely use a pair of extra hands, and we mean lots of them.
Trust us, you can’t do it solo over time. Ask any successful entrepreneurs. They’ve been there, and never returning.
It’s impossible for just one person to run a scalable business, which is why jack-of-all-trade business owners lose traction quickly.
Know what your strengths and specialties are. Perhaps you’re a pro when it comes to research products, or maybe enticing people is a talent you were born with. Focus on your expertise.
Then, look for a trustworthy co-founder who complements your skills and strengths. Consider other factors, such as their business philosophy, values, and characteristics. Don’t hire more people than you need.
There You Have It!
Remember, drawbacks in small businesses are inevitable. There might not be a perfect solution to avoid business failure, but as long as you stay away from these common mistakes, you’ll be good.
You may also like: Essential Tips for New Small Business Owners
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