Many successful small business owners and entrepreneurs made mistakes when they started their businesses that they wish they could go back and correct. Spending too much money on unnecessary equipment or on an office that was too big as well as wasting money on advertising that didn’t work are just a few of the mistakes that they made. Today’s blog puts together some of those mistakes so that, instead of making the same, you can learn about them here and do your best to avoid them. Enjoy.
- Not knowing or underestimating what your startup costs will be. This is possibly one of the biggest mistakes that new entrepreneurs make in that they underestimate, sometimes greatly, the amount of capital that they’re going to need in order to get their business up and running. Not only that but to keep it running for the first 1 to 3 years, during which time most businesses don’t usually turn a profit. Most entrepreneurs can calculate the set costs like renting a retail or office space, the equipment that they’re going to need, their inventory and all of the legal expenses that are going to face. The problem starts when it comes to things like marketing and promotion, advertising, insurance costs and, in some cases, utilities.
- Going “off plan” and losing focus. Many entrepreneurs that we talked to spoke about how they went after every potential source of revenue that they could find but that, at the end of the day, it sidetracked them and prevented them from taking care of their true customers. While reevaluating your original goals every so often is a great idea, making sure that you are headed in the right direction and staying the course is the best way to ensure long-term success.
- Failing to delegate responsibilities. When most entrepreneurs start their business it’s just them or maybe one or two more people. What can happen as they grow and become more successful is that they refuse to relinquish control of everything that needs to be done and take on way too much responsibility. The fact is, if your business is doing well and you want to keep doing well, hiring people to take care of the less important but still necessary tasks is not only a good idea, it’s vital to keep the business going and growing. The fact is, if you hire excellent people and train them to do things the way you want them done, your business can only grow bigger and better. One solution to help eliminate this problem is to outsource your inventory management. Outsourcing your inventory management to a company that can oversee your inventory and shipping will greatly help to increase your efficiency. This will allow you to ensure that all products are sold at their appropriate price point and shipped efficiently allowing you to focus on the many other aspects of your business.
- Hiring the wrong people. Many entrepreneurs get so overwhelmed by the dozens of tasks that they need to accomplish daily that they will gladly take on any available set of hands in order to get a little bit of help. The problem is that many times they hire someone who either lacks the skill or the motivation to help them succeed and, in time, this person can end up being more of a hindrance than a help and add to the problems more than help them. These days there are so many temporary staffing agencies and online solutions that there’s really no need to even hire full-time help so, until it’s actually necessary, you can avoid it and avoid the hassle until you’re ready to hire someone full-time.
- Letting your new business take over your life. Many of the entrepreneurs that we talked to lamented that, at least during the first few years, they did nothing but eat, sleep and breathe their business. While this is necessary in order to lay a strong foundation for any business, it can also lead to burnout that can lead to health problems and apathy. The fact is, if you haven’t had a real vacation in more than two or three years and you don’t remember your son’s name, it may be time to step away from your business and get yourself a little bit of R&R. Trust us, your business will still be there when you get back and you’ll have a refreshed attitude and spirit that will be a real boon to the entire operation.
Hopefully the mistakes above are mistakes that you haven’t made yet and, now that you know about them, you can avoid them. (Don’t worry, you’re sure to make a few of your own.) If you have any questions about setting up the finances for your new business venture, please let us know and we’ll help you out in any way that we can with information, advice and solutions.