Here are seven common mistakes from small business owners:
Trying to be a Jack-of-all-Trades
One of the biggest mistakes when you start out is trying to do it all. Budgets are tight, and you can’t afford to hire people. But as you grow, remember that you can’t be an expert at everything.
“I was advised to outsource many things, but I didn't,” says executive coach Marsha Egan. “It ended up costing me twice as much.”
Recognize that you may not be a specialist in finance, taxes or advertising -- and hire the right people to help you.
Picking the Wrong Staff
Hiring the wrong people can also be a killer for small businesses. One common mistake is bringing on family or friends. Leanne King regrets hiring her long-time friend when she started SeeKing HR. After a rocky 18 months, the relationship fell apart and her friend moved to another company. “Looking back,” says King, “I lost a dear friend. It has been three years and we rarely speak.” Not hiring enough people can be equally limiting. “The biggest mistake I made was not realizing how important it is to get good people aboard as quickly as possible,” says Barry Maher, business consultant and author of "Filling the Glass". Maher says his business took off once he figured out that bringing on specialists was actually faster and cheaper. You might lose out on business if you wait to hire extra day care teachers or an extra hand to run the kennel.
Misreading the Market
Charging into a market that you don’t fully understand can cripple your business. Small businesses fail because they don’t understand their customers. Remember that it’s not about you. Even if your caregiving service is excellent, you need to be meeting your customers’ needs for them to buy it. How much do you know about the day care industry? Have you ever working for a housekeeping company before? Do lots of research and talk to people already in the business for advice -- before jumping into deep waters.
Assuming Customers Will Come to You
Similarly, small businesses often make the mistake of assuming that having a great service will automatically bring customers to them. The trouble is, no one can buy from your company if they don’t know about you. Budget for marketing expenses. Advertise in local newspapers, send out flyers, create a Facebook page and set up a profile on Care.com. After all, the only way for people to learn about you is to get the word out.
Not Understanding You Need Cash
Sometimes you need money to make money. “The biggest mistake I ever made was exhausting my personal funds to start my business, instead of raising capital,” says Jilea Hemmings, CEO of Greenie Tots. Starting up with your personal savings or cash from friends and family can help you launch, but at some point you may need larger sources of support. “I wish that I had sought seed investors and looked for state grants, instead of using my own funds,” says Hemmings.
Not Having a Plan
Small business entrepreneurs tend to be passionate people. Venturing out on your own requires ambition and a willingness to take risks. But remember that you need to have a plan for how you’re going to make money. Just starting a business for fun is going to result in a short run.
Thinking You Are Your Business
We commonly define ourselves by what we do. It’s often the first question someone asks us when we meet them. A major challenge for small business owners is identifying too closely with their companies. Managing a small business can be a roller coaster of ups and downs. It’s important to separate yourself from your job.