Most new small businesses won’t be in business this time next year. That’s the cold hard facts. Though it is easy to start your own business, it takes a lot more to succeed in business. There are few common mistakes made by small business owners. Let’s explore them so you can avoid them.
Small business owners obviously have a lot on their plates. Generally speaking, they depend upon themselves—and those they employ—for their living. Consequently, it’s not uncommon for new businesses to overextend themselves in an attempt to get slices from as many markets as possible. More products, more profits, right?
Focusing on too many different products or services can derail a business, draining significant manpower and resources along the way. What’s more, it could result in taking the strongest products for granted, something that can cause regret later on as competitors take note.
To avoid this problem, direct the majority of focus on core competencies—as counterintuitive as it might seem to a business that wishes to grow. Set some time aside to plan for the future, but don’t branch out or diversify too quickly. Maintaining an enduring, laser focus is critical.
Mistake #1: Thinking success will come overnight.
Great cities and structures, and even successful companies, were not built overnight; they all required hard work, perseverance, or as Churchill famously said, “blood, sweat and tears.” While an entrepreneur might have a great vision and quality products consumers want, there can’t be an expectation of a huge payday immediately upon launching a business–it is a slow and steady build.
Mistake #2: Refusing to delegate tasks.
Similarly, many small business owners feel the need to take care of everything themselves. But just because Elon Musk claims to work 100-hour weeks doesn’t mean all entrepreneurs need to do the same. And know this: he has great teams in place to help advance his vision.
Mistake #3: Hiring the wrong kind of people.
It’s nearly impossible to have a flawless track record when it comes to hiring, so it’s inevitable that at least some of the people you hire simply won’t work out. Having the right people in place is critical for the success of any company, and it’s even more critical for small businesses, Conversely, hiring the wrong person for a business can be just as important and can set your company up for failure.
Mistake #4: Failing to define the market and know the customers.
An entrepreneur might think a particular product or service is the best idea—and maybe it is. But without knowing the target audience and which other companies are also focusing on them, it will be significantly harder to sell the idea. If a business’s market isn’t clearly defined, it is nearly impossible to hone in on how to best position the product or service in a way that is compelling.
Mistake #5: Misunderstanding the importance of having cash.
Today’s businesses need access to capital in order to remain nimble and better compete in today’s fast moving markets. Without growth capital, companies are unable to respond to new opportunities, pay their own bills, and otherwise grow their business.
Unfortunately, many new small business owners underestimate the importance of maintaining positive cash flow. This lack of proper planning and forecasting leaves them with their hands tied when they first realize their predicament.
Mistake #6: Lacking a clear vision.
How will staff be able to follow its leader if they’re not sure where the executive is trying to go?
With a clear-cut vision for a business, it’s much easier to meet goals. A vision allows all team members to remain on the same page, working together toward the same objectives. When small business owners have an idea of where they want their companies to wind up one year, two years, five years out, it becomes that much easier to end up there.
If you don’t have a crystal clear vision for your business, it might be time to stop thinking so much about strategy (i.e., how to reach your goals) and really pinpoint what the organization will accomplish, and by when. Once the vision is defined, it’ll be easier to rally the team.