Tuesday, May 26, 2015

Top 8 Mistakes Small Business Owners Make

When starting a small business most entrepreneurs are full of enthusiasm and high expectations, but, according to the US Small Business Administration, around 50 % of them fail within the first five years. Reasons for the failure are diverse and numerous, just like the risks involved in starting and running a small business. Here are some tips how to be within those 50 % of small businesses which manage to sustain and succeed.

1) Jump straight into a new business, dive in headfirst: Realistic and objective relationship with your own business starts when you start your company. Sometimes there is no time to analyze and think too much, unplanned opportunity shows, it is the right moment etc. But mostly you do have enough space to take a critical look at your venture before investing too much time or money. Think about things such as the weakest part of your plan, competition, chances on market, what would you do if this plan wouldn't work. These critical analysis will help you avoid some of the basic and very common mistakes. Believe it or not many of them could be skipped at the very beginning.
2) Underestimating how long it will take until the business starts to support itself and you: This simply means two things. First-you must be aware that each new business needs a lot of time to spread and start functioning-earning money, and you must count with that-being prepare to see no income for a first few months. Second-you must calculate how much exactly it is going to cost and what time period is necessary for your business to attract regular customers/clients. This is the most serious mistake and problem which make people bankrupt and give up.
3) Not knowing your customers: When you get an original idea of your business, your next thought should be the market and the customers. No matter what kind of products or services you provide, you must know in the first place what is your target group of people, who are your potential customers, what do they need, how can you help them, how can you reach them. And even when you already have a solid customer base, you must be careful about changes in fashion, finances, approach and everything that come with the times which are changing.
4) Spending or borrowing too much: Initial high expectations can work against small business owners when they lead to borrowing too much. When you take a credit or a loan from the bank, don't forget that you are the one who is going to return that money and your business won't start generating profit immediately. The larger the loan, the larger the monthly payment. When you do get the money for your new company, be careful what you are going to spend it on. Don't spend too much on equipment, furniture, hiring too many employees and renting a huge space. Go step by step.
5) Not being prepared for taxes: If this is your first small business to run, you must remember the taxes, as the regular monthly cost. People often make this serious mistake thinking only about invested money and profit it will bring. But you have to fulfill a couple of obligations to the state, you can't avoid them and these amounts are not low, especially if you let them accumulate. It's a good idea to have a separate bank account only for this purpose, put money into it from each payment you receive.
6) Lack of marketing and advertising plan: A marketing plan is a part of your initial small business plan. It creates the kind of attention you want to get in front of your customers. It is what attracts people to you and it is a story which stands behind your products or services. That story is what people like to buy. Especially if your business is fresh new, the marketing is the only way to let people now you are there. Having a website, a good website is a good way to promote your business and make it visible.
7) Ignoring the employees is a mistake many entrepreneurs make. You might be the key to everything but you cannot do everything. That is why you hire the people to work for you. And with you. Right staff is very, very important. By "right" I mean people who knows their job, and do it well. And for that you have to make them feel useful, important and respected. If you share your ideas, success and money with them, you will get the positive feedback, and that will have a positive impact on your company.
8) Giving Up: As we have already said building a business isn't an instant product. It is a very reason many companies shut down so soon. But, if you have a control over your finances and realistic business plan you should never give up when you come across the first obstacles. All the good and important things require certain period of time, and having in mind all the challenges of running a business brings, it's normal that the beginning is hard and not each period of the year is equally successful. If you're not starting than keep in mind all the bad moments you used to face with and how did you face with them. Some of the most successful entrepreneurs failed a few times before doing extremely well.
Jovana is technical writer, editor and small business expert at Bizcloud. Bizcloud is a combination of site-blog, application and service created in order to promote small businesses.
Article Source: http://EzineArticles.com/?expert=Jovana_Zivanovic

Article Source: http://EzineArticles.com/3348097

No comments:

Post a Comment