5 common business mistakes (and how to avoid them)
Are you looking to dive into the wonderful world of entrepreneurship? It’s not easy to start a small business but there are plenty that have gone before you. Before you get your business up and running, it might pay to do a little research, so you can avoid common startup mistakes. Here are five mistakes small business owners often make – and how you can avoid them.
1 Failing to plan
You may know what you want your business to look like now, next week and next month – but what about next year? And the year after that? While it’s important not to get lost in the paperwork and actually take action, it’s worthwhile doing some serious planning. Whether it’s a proper business plan or a document drafted between you and your advisor, get something in writing that sets you up for a successful future. It will also help you stay on track when business is booming.
2 Forgetting about the competition
It’s one thing to be excited about your business venture, but don’t forget to check out the competition before you get started. Do you have any direct competitors? How will your business, product or service stand out from the crowd? It’s also a good idea to survey the market before deciding on your price point. You need to understand your market and your competition, so you are fully aware when crafting your business and marketing plans.
3 Going too big or too niche
Defining your target market is an important step when creating a new small business. Who is your business serving? And how will you reach them? While it’s important to be specific when determining your target audience, it’s also wise to not go too niche. If your audience is too small, you may have trouble reaching them – and making a substantial profit. And don’t forget you can always widen your products, services and vision down the track.
There’s no doubt about it, it costs money to run a small business. However, many small business owners overspend, particularly in the first year of operation. Try to keep your costs low so you can maximise your cash flow. In due time, you’ll be able to loosen the purse strings, but if you give yourself more time, you’ll have a better idea on where your money is best spent. Also remember to separate your personal and business accounts straight away to keep things neat and tidy.
5 Being afraid to network
If you’re a new small business owner or entrepreneur, it can be daunting to network with other more established business owners. But if you fail to get out of your comfort zone, you’ll limit your connections, which can really be invaluable in the world of business. Start small and attend something local. Over time, as your confidence grows, you can start putting yourself out there. Remember, networking isn’t always about getting something, it’s about developing great business connections and even friendships, that can support you on your journey.