When it comes to successful small business ownership there are several things you have to remember to do on any given day—your to-do list is probably never-ending. Just as important as knowing what needs to get done is knowing what common mistakes you should NOT be making. Now, we’re not here to tell you that there is one, perfect, “right” way to run a business. We know that every industry, every small business, and every small business owner is different—and we respect and value what all those differences bring to the small business world! We ALSO know that there are some common, easily avoidable pitfalls that small business owners find themselves in. So, we’re going to walk through a few of the big-ticket mistakes and make sure they’re on your radar as red flags.
Failure to Launch
The first step that we always recommend small business owners take when starting or expanding a new enterprise is to draft a business plan. This may seem like an intimidating task—especially for a first-time entrepreneur—but it does not have to be. You do not need to craft a perfect and elaborately laid out plan, you just need to start putting on paper the basic information of what your business will be and how it will operate. This formal step in the startup process is being skipped more and more, but we are urging you NOT to follow that trend! A report from Harvard Business Review showed that entrepreneurs who formalized a business plan were 16% more likely to have a viable small business. It is very clear that planning pays off!
Doing Too Much
You might be thinking to yourself, “What do they mean by doing too much? Too much WHAT?” The answer—everything. There are two ways in which small business owners can misstep when it comes to “doing too much”—either taking on too much for themselves to do or trying to have their small business do too many things.
- Successful small business owners don’t operate in a vacuum. When you try to do too many things by yourself, you burn out and your business suffers. There’s no simpler way to say it. If you want your small business to succeed, you have to zero in on your strengths as a business owner and use them to drive your business toward success. According to Forbes, successful small business owners should focus their skillset and energy on the high-income and legacy-building tasks of business operations. That means focusing on the items that are bringing in the most revenue and contributing to the longevity and success of the business moving forward. Everything else? Delegate!
- Finding your niche and staking your claim will move your small business toward success. As you are writing your business plan, make sure that you are intentionally thinking about the niche you are carving for yourself in the business world. Regardless of the market you are entering, you need to be thinking about what will make your small business unique and what currently unmet wants or needs you’ll be able to serve. Finding your niche will help decrease competition, increase customer loyalty, position you as an expert in your industry, and much more!
Cash Concerns
While there are any number of reasons a small business might not be successful, the most obvious is a lack of funding. In a 2021 analysis of closed small business post-mortems, 38% failed due to running out of cash or failing to increase capital. According to Forbes, the solution to this problem can be found in one place—your bottom line. They recommend keeping three to six months of operating expenses as your account balance at all times to be prepared for unexpected cash flow challenges.
Concerned? Chat with Growth Capital!
Starting, owning, and operating a small business can be a rewarding—yet daunting—task. If you’re worried that your small business isn’t changing, growing, and thriving the way that you planned, let us help! With over 40 years in the business of helping Northeast Ohio small business owners grow their businesses, we know how to walk you through where you’re at and plan for where you want to go. Contact us today to get started!