So you have decided to follow your dream of starting your own business. Though there is no sure-fire way to make your business successful, there are certainly many tips on how to ensure you avoid the small business pitfalls when growing your business. Here are fourteen points provided by the entrepreneurial founders of YoungEntrepreneur.com that are important to understand prior to embarking on your entrepreneurial journey.
Pitfall #1: Not listening to those who know the ropes.
It is important to believe in yourself when starting your business, but don’t become too self-assured. One of the most humbling realizations is that you do not have all the answers! Seek out professionals such as lawyers or CPAs that can help you deal with some of the technical aspects of your business. It is also wise to seek out individuals directly involved in your industry who can provide insights into the operation of your business and the demographics of your clientele.
Pitfall #2: Lacking a business plan.
You’ve likely been told not to move forward until you have a business plan in place. This is great advice, but don’t attempt to create one by flying by the seat of your pants. Rather, carefully craft your business plan so it will be a critical component in your entrepreneurial success. Your business will be all the better for it.
Pitfall #3: Situating your business in a bad spot.
All business owners should find a location that is both easily accessible and highly visible to potential clientele. When picking out your site, keep in mind the changing needs of you and your customers, the possible addition of competitors to your area, and the image the surrounding businesses project. Also consider the duration of each lease you are asked to begin or renew.
Pitfall #4: Not knowing who your customers are.
Before you begin advertising, consider the audience that you’re trying to reach. Understand who they are and what about your product or service will interest them. From there, create a marketing angle that will cater directly to your target audience. Starting this early on and continuously adjusting your marketing plan based on what you learn in the marketplace is ideal.
Pitfall #5: Not maintaining your brand while marketing.
When establishing yourself in the public’s eye, be sure to maintain the same marketing image throughout every form of advertising. Marketing solely on TV, in print, or on the Internet will limit your potential audience. Show your “face” by combining several forms of media to reach a broader spectrum of clientele. And time new marketing campaigns with the release of new products and services, discounts, seasonal sales and upcoming events that will help you to generate business.
Pitfall #6: Confusing marketing campaigns.
Remember the phrase “keep it simple”? This idea applies to marketing. The catchiest slogan or most imaginative ad is futile if no one gets it. And remember: if it sounds too good to be true, it probably is. Don’t oversell your product or make promises you can’t keep; the public is more informed today than they’ve ever been.
Pitfall #7: Not knowing who to market to.
People go into business because they believe they have something unique to offer to the world. Do not assume that everyone will share your level of passion about your product or service! By knowing and understanding your target audience you can gear your advertising toward them. Attempting to win absolutely everyone over to your product or service is not a reasonable goal. Any new marketing technique should be tested first—perhaps by utilizing a focus group—and then adjusted according to the feedback you receive.
Pitfall #8: Forgetting your established client base.
Did you know that 80 percent of customers are repeat business? Don’t make the mistake of focusing solely on new prospects and neglecting your existing clientele. They are the reason you’ve made it this far! Occasionally rewarding them for their loyalty to your business with perks new customers don’t receive is a nice way to say thank you.
Pitfall #9: Ineffective marketing feedback.
It’s difficult to know whether your marketing strategies are working if you’re not doing the proper follow-up. Often failure to follow up leads to businesses changing strategies unnecessarily, thinking a change will result in a better turnout. However, the tried-and-true formula typically works best and you shouldn’t give up on it! Establishing your brand means building a reputation that your target audience will begin to expect and rely on.
Pitfall #10: Not keeping a close eye on finances.
The waiting period between the onset of a business and the influx of revenue doesn’t escape any new business. It’s imperative that during this time you make sure you have a financial cushion for personal expenses as well as enough funds for the start-up costs. Avoid just charging the credit cards, as doing so will only incur interest on top of your expenses, as well as bad debt if you don’t have the money to settle the account. Making rash spending decisions (like throwing your entire budget to that amazing Super Bowl ad) will hurt more than help if you have no money left for daily costs of operation or emergencies.
Pitfall #11: Not addressing outstanding customer balances.
Knowing how to aggressively and successfully collect on delinquent accounts without damaging customer relationships is absolutely essential. If you’re too afraid to talk money or to risk offending a non-payer, your business will fail. If you haven’t received payment at least 30 days from issuing the invoice, issue another. It’s always possible they didn’t get the first, or simply filed it away and forgot the debt entirely. Remember: it’s not personal; it’s just business.
Pitfall #12: Not knowing how to say “no.”
No one can perform all the necessary daily tasks when running a business. People will constantly request things of you, and you will simply have to learn how to say “no.” Your productivity will decline if you are stopping every five minutes to do something for someone else. There are self-assertiveness classes you can sign up for if you feel you need a little help in this area.
Pitfall #13: Doing all the work.
See which of your tasks you can delegate to others that would better suit someone else’s talents. Doling out those secretarial duties and mindless tasks will result in streamlining your day and your profitability. There’s no need to stress yourself out by attempting to do everything on your own. Hire a receptionist, accountant, or store clerk. Use your employees wisely and keep the important things only you can do on your plate.
Pitfall #14: Conducting empty meetings.
Too many businesses conduct meetings that pull everyone away from their duties to discuss unimportant issues, all in the name of productivity. Make sure your meetings have an agenda, a clearly defined outcome, occur only when necessary, and involve only those people that need to be there. Everyone will be more in tune, and your business will run more smoothly.