5 Mistakes Every Small Business Owner Makes When Starting Out

19 Jun 2016 in Business

Starting a business can be a highly rewarding and lucrative venture. Unfortunately, the statistics aren’t stacked in favour of business owners when we consider that only half of small businesses survive more than three years. After the initial excitement of starting a business, the pressures of running a business start to build up. There are a few common mistakes which all small business owners will tell you they make when starting out.

Failing to Plan for the Future

It can be easy to get caught up in the here and now when faced with the challenge of running a business. It’s important to take a step back and look at the bigger picture, while making sure you don’t let the everyday tasks fall to the wayside. It might be simpler to handle the more immediate expenses, but thinking long term is essential for running a successful business. Saving money on your electricity might seem like a worthy pursuit, but ultimately this won’t be a driving force in the growth of your business. Using bookkeeping software can help small businesses to identify threats and opportunity for growth.

Not Keeping Accurate Records

Many new business owners will tell you they used to keep their business records to a bare minimum to cut down on business admin time. They soon learn that keeping accurate records using business accounting software will offer an insight into their operations. This specialist software will also protect you against data loss – something that paper records or a spreadsheet often can’t provide.

Not understanding the Market

Launching a new business venture without proper research can be an expensive mistake to make. Failing to understand your market will also mean that you business plan likely has holes in it. Without a strong understanding of the marketplace, business owners may miss opportunities or fail to understand the demands of the industry. The market may be trend-based, year round or even season. Failure to recognise the differences may lead to catastrophic results for a young business.

Getting Caught up in the Minor Details

Business owners often struggle to make the transition between juggling the everyday demands of a business and taking the time to look at the bigger picture. It can be easy to get caught up in the small details, but doing this can prevent small business owners from taking control of the bigger decisions and driving their business forward. Business owners and even managers can benefit from setting aside time at the start of the day to manage those smaller tasks that eat into the day. If you’re heavily involved in the everyday running, it can be equally beneficial to set aside time to work on business development.

Focussing on Customers Over Employees

If your employees are the face of your business, you can’t afford to have an unhappy workforce. Investing in your employees is an essential component of a successful small business. While it may seem risky to invest in employee development when they could leave at any moment, it would be riskier to not invest in their development if they plan to stick around. Focussing entirely on your customers at the expense of your employees is a short-term strategy that will ultimately lead to an unhappy workforce.