In last month’s Growth Capital blog, we walked you through some common mistakes small business owners make and how they can be planned for and avoided. Realizing that many people may still be in the dreaming and planning stages of small business ownership, we thought it prudent to also take a look at common mistakes people make when launching their new small business venture.
The Reality of Starting a Small Business
We won’t mince words here—starting a small business is challenging. Whether you’ve done it before and are just pursuing another, new avenue or you’re entering the business world for the very first time, the process of getting your small business off the ground can feel daunting. And, the reality is, not all small businesses make it. In 2023, Business News Daily reported that 18% of startups don’t last more than two years and 55% of all businesses close up shop within five. We don’t share this to scare you away from starting your small business—quite the opposite, actually! We’re here to provide some bits of knowledge that will hopefully empower you to start your small business on the right foot and beat these odds.
Startup Mistakes & How to Avoid Them
Business experts will likely tell you that there are any number of ways that starting a small business can fall flat. We’ve narrowed our sights on three key mistakes that experts from the likes of Forbes to the U.S. Small Business Administration (SBA) all agree are too common.
- Not creating a solid business plan—Writing a business plan is the foundational step in starting a small business. It prompts you to map out what your company does and how you see it operating, who you intend to serve, what it will cost to successfully meet your business goals, and much more. If you don’t take the time to map out a plan, you’re more likely to be surprised by unanticipated costs, marketing challenges, and avoidable roadblocks to getting your products and/or services in front of the right customers. If there is only one mistake you work to avoid, it should be this one!
- Failing to seek out business advice—While there is no one “right” way to start a business, there are countless ways that haven’t worked—see the statistics we cited earlier. One of the reasons small businesses fail is that entrepreneurs try to take on the challenge of launching a startup on their own, instead of seeking out advice from folks who have been there and done that. Research has shown that entrepreneurs who consult with business mentors are more likely to survive those crucial first few years of operation and see increased revenue.
- A lack of market research and target audience planning—As important as it is to know who you are as a business owner and how you want your small business to operate, you need to spend a significant amount of time figuring out who your target audience is and what they want/need from you. According to Harvard Business School Online, taking the time to engage in market research before you launch your startup will allow you to best align your products and services with the right audience, will help you determine what that audience expects from your business, AND will help you determine a realistic price point that audience will pay for what you have to offer. Failing to complete this step will likely result in a loss of revenue and wasted time and money on marketing efforts.
While we have highlighted some of the most common and easy-to-avoid startup missteps, this is by no means a comprehensive list. We recommend checking out the resources and information SCORE has available, also. You might remember the SCORE Business Mentoring program from our February 2024 blog!
Work with Growth Capital
One of the things we love most about working with small businesses is passing down our 40+ years of experience to help people navigate avoidable pitfalls. Our team of trusted experts really has seen and heard it all, and they’re ready to help you prepare to successfully finance and launch your small business dream. Contact us today to see how we can help you take your next step in small business ownership!