Are you feeling overwhelmed with the worries that come with building your business? The journey to starting a business is different for everyone, but the common thing you’ll have with other owners are the long and hard hours of starting it.
We know that it can be overwhelming having to run every aspect of your business yourself. When you want your business to succeed it is also worrisome that you might mess up in the process. Here we’ll focus on six of the most common mistakes new business owners make.
Failing to have a business plan
Creating a business plan can be difficult, but doing so is a necessity. A business plan shows what direction you see your business going in. In your business plan you want to include an executive summary as well as a company description. These two categories show why you are doing what you are.
Next you want to include your market analysis which gives you an idea of how the economy and competition are doing in your area. You will also include how you plan to operate and run your business from the inside. This means day to day work, employees, yourself, etc.
Going a little more in depth you should have your service/product line category, marketing plan, a budget plan, and your companies’ financial projections. These last 4 categories are essential. These indicate:
- How you want to approach your sales/service delivery,
- How you will make yourself seen by customers,
- How much you want your company to spend from what it makes and,
- What you expect your financials to look like in the next year or two.
Creating a business plan might seem like a lot to do, especially when you have so much more to take care of in your business. But doing so will save you so many more headaches from NOT having a plan, roadmap or goals.
Not creating a target market
Having a target market will save you so much money when it comes to your marketing. Creating a target market is so crucial for your business because you need your ads to be seen by the people that will be interested. Otherwise, you will find yourself paying for and and planning tons of marketing campaigns that fail to yield results. Knowing your target market ensures YOU know what people will benefit by the service or product you’re offering. And it’s those people you want to focus of reaching.
Failing to market your business
Marketing your business can sometimes seem like a waste of money and time but, if done correctly, it can bring the business to you without you having to do much. After creating a target market for your product line, you want to think about how to get the word out. And let’s be clear, while “word of mouth” is a good marketing vehicle, it’s not the end all/be all of your marketing. Nor should it be.
You’ll want to consider things like flyers, newspapers, bus benches or billboards. You can also look at internet marketing or advertising. Running pay per click (PPC) ads on platforms like Google, YouTube, Facebook, Instagram, Twitter or a multitude of other places can also be a way for you to get your name, product and service in front of your target market.
There are tons of good marketing campaigns done in the past; both successful and unsuccessful, Doing some research of these can be helpful to guide you as you are starting off.
Not creating a budget to help you stay afloat
Remember, your business can still run out of money even when the money is continuing to flow into the bank. This aspect can become confusing to some people because it seems fairly obvious that if your business is still getting customers and making money how can you run out of cash?
Sometimes the answer is fairly simple; you’re spending too much. It is common for people to forget to keep an eye on their account and before they know it you’re down to $0. This issue can be solved by creating a budget. This will limit your spending and organize it according to category. We did a post on how to create a personal budget, which can give you some guidance for preparing a budget for your business.
Sometimes the solution is more complex. People might find themselves with a successful budget, active clients and profit but still run out of cash. This issue stems out of whether your payments are coming through or your invoices are just staying in account receivable. The result? Poor cash flow management.
This issue can be solved by shortening your payment terms on your invoices to speed up the collection of your accounts receivable. This will increase your cashflow, which you are then able to reinvest in your company and operations.
Failing to invest in clients/employees
When beginning your business, it is very tempting to keep spending money to acquire new clients. While there is nothing wrong with this, you must continue to reach out to potential customers but not neglect the ones you already have. Remember it is less expensive to keep an existing client than obtain a new one.
Therefore, you want to make sure that you continue to please and market to your current clientele. This can be through emails, birthday cards, holiday cards, etc. You want to ensure existing clients are happy, returning and don’t forget about you.
Another group of people that are typically forgotten are your employees. People often forget that those employees become the face of your company so try to keep them happy! You might want to try motivating or rewarding them every once in a while. Also, make sure you routinely look at things like pay rates, benefits and general work environment. Not only will this generally lead to better customer service, but happier employees who in turn satisfy and delight your customers!
Being Too Afraid to Mess Up
Being a new business owner often means learning as you go. Therefore, many people fail to even begin, because it takes a lot of self-work to get it running. You must find a balance between cautiously and effectively learning as you go versus not moving at all because you are too scared.
Research what you must know to start. Start with your business plan, research some more as you go and throw yourself out there. Truth is, you will make mistakes but learning to refocus and learn from them is where you want to place your energy. You can never move your business forward if you don’t put one foot in front of the other and take the journey.
So, before you do anything official, research what you are doing and seek a professional if needed. You want to have enough knowledge to complete the task successfully, but don’t stop yourself just because you’re not an expert. Remember it’s better to be a jack of all trades than a master of none!
As you can see there are a lot of different areas where you can make mistakes. But don’t let that stop you from trying. This blog is not only here to help you, but also provide you with some resources.
To that end:
- Here is a checklist from SCORE to help keep you on track
- The SBA is another useful website to give you some tips and guidance as you start your business,