Mistakes small business owners make, especially when they are trying to grow, are something that comes with every business. Typically, business owners are still trying to figure out their groove, get their systems in place, and maybe even find their perfect target market. It’s not an easy hustle—but it’s a worthy one.
Every small business owner wants to grow and make more money. But there are 10 common mistakes that small business owners make that can throw them off their quest for success and leave them feeling defeated. Don’t let them happen to you!
What are the most common mistakes small business owners' make while growing?
Being a small business owner has always been very difficult. Harvard's research shows that three out of four risk-based startup companies do not last more than five years.
While small businesses face numerous challenges, dealing with some of the biggest mistakes small business owners make can help to improve the likelihood of success.
Running a small company can be both gratifying and demanding. Knowing your numbers, investing in the right people, capitalizing your business properly, making plans for tax obligations, and planning for the future can all have a positive impact on your financial objectives.
As everyone’s situation is unique, consider talking with your legal, tax, and financial consultants to determine your best approach.
1 - Not knowing your target market.
You never know where, why, or how a potential customer or client is going to learn about your business. If you have a combination of messaging out there, potential prospects will have only a vague expectation of what your company can deliver.
One of the first mistakes small business owners make when starting out is that they don't take the time to identify their target market, which means they waste time and resources while they chasing disinterested clients and buyers.
Some home-based business owners describe their target market as "everything", but ideal consumers have unique attributes, characteristics, and circumstances that your product or service should speak directly to.
Knowing your target market helps you to place marketing campaigns where your audience will find them and composed in a way that will directly address their needs.
For example, you can run an ad in your local paper that serves a million people saying that you're a virtual assistant that deals with Realtors. There is a chance a million viewers will see the commercial, but most will have no need of a virtual assistant. So, it comes down to the fact that the niche products you offer will only sell and thrive when they are offered to the people who need those products. It is imperative you get to know your target market.
2 - Trying to do it all yourself.
One of the worst mistakes small business owners make is to think that they can do it on their own. Surround yourself with good individuals where your abilities are weakest.
Why you should invest in good people:
- Burnout: business owners to try to do everything themselves to reduce their costs, and this can lead to physical or mental burnout. An entrepreneur must have a strategy to outsource their web production, copywriting, design, and marketing to professionals who have those specialist skills.
- Business growth: Your business simply can’t grow if you do not hire professionals to handle vital parts of your enterprise. With more hands on deck, your business will grow from strength to strength.
- Jack of all trades: As the old saying goes, ‘Jack of all trades, master of none’. While as an entrepreneur you may possess a natural talent or two, you cannot be an expert at everything.
Considering the above, all young small business owners hoping to grow need to learn how important it is to recruit or seek external assistance instead of doing it all by themselves.
3 - Overspending or overserving.
Many small business owners find themselves in trouble because they don't control their costs. Gotham Concierge, iParents.com and countless others are names of familiar businesses that expanded too quickly and had to shut down.
According to the New York Times, both businesses had a bright and prospective start and were generating top dollar only to shut down because they overspent.
Large Format Digital is another company of interest. Based in Edgerton, the company was known for printing adverts on the side panels of vehicles.
With over $3 million in sales, the company seemed to be doing just fine until the founders decided to spend $1 million on building their own installation facility. While it was not a bad idea in itself, that decision led to a spiralling downturn..
The lesson in these examples is that it pays to be conservative in your expenditure until your business is in steady profit. Watch out for budget busters, like offices and department stores that are too large or costly, non-essential personnel, and investing in more equipment than you need.
The best way to prevent entrepreneurs from steering their new businesses off a cliff is to plan to prevent possible money errors. Remember that your target market may consist of different types of customers with different needs so you will need to constantly adjust your offering to suit their needs to stay in business.
When your enterprise has the perfect offering for the perfect group of people, it will thrive and withstand the test of time.
4 - Underspending and underserving.
In an honest attempt not to overspend and over serve, most entrepreneurs find themselves making the mistake of underspending and underserving, leading to adverse turnaround for their business.
Not taking risks in itself is a huge risk. The key, however, is balance. Having a balanced view of your business and customers will help you as a business owner know when to take opportunities, serve larger markets and expand your business with little or no risk of bankruptcy.
When it comes to marketing and advertising your brand, you can reach your desired audience by maximizing digital adverts without underspending or overspending.
5 - Not investing in the best people.
Not investing in the best people kills a business. The topgrading process helps you hire just the right people for the right roles in your enterprise. Having a great team to work with does not happen by mere chance—the right process and strategy has to be employed for this.
With topgrading methods, training and tools, you hire and invest in the best people to work with you and record huge successes because of them.
The American Heart Association recorded a huge improvement from 25% to 95% after hiring A-players and raising over $50 million the following year because they used topgrading.
E*TRADE was saved from bankruptcy by topgrading as the CEO, Paul Idzik says: “Without Topgrading, E*TRADE would have gone under. Topgrading helped us survive and flourish”.
You can make use of our Ultimate Hiring Guide. The guide will help you attract, recruit, interview and hire great talent for your business.
6 - Not using technology to save time.
When technology is not maximized, time is lost and lost time can never be regained. Time is of the essence because time is money! In business, lost time is equal to lost money.
Top productivity tools help you maximize time and get more work done.
Top 10 best productivity tools for small business owners:
- Inbox by Gmail
- Todo Cloud
- Google Drive
Back end software can save you much time. You can manage HR by using streamlining operations like onboarding, scheduling, time tracking and payroll. Remember, time saved is money saved. When you let our software do the job for you, we help you save thousands of dollars and we do so using a single integrated system.
If you are in retail, you will particularly benefit by streamlining your operations, centralizing your data and avoiding inconsistencies—all with an integrated POS.
7 - Not investing in sales or marketing.
Marketing is the bedrock of all businesses. Even the most accomplished businesses market their products and services to reach the right audience. The marketing industry is constantly evolving—therefore, for your business to stay afloat, it is vital you keep up with the changes and new developments in the marketing industry.
5 ideas for retail marketing:
- Prepare a budget for traditional media
- Attract potential customers with a hook
- Provide your customers with a unique ordering experience
- Connect with your customers on a personal level
- Explore bigger outreach opportunities
Failure to invest in sales and marketing will only reduce the possibility of your reach to your customers and that is bad for business.
8 - Failing to develop sound systems.
Having a sound system to handle the base operations of your business works wonders. You can have no better system to take care of your operations than Push Operations.
With an integrated system in place, you can take advantage of our goal setting system, OKR’s, smart goals and many more to systemize operations, save your business money and time and overall help your business grow.
9 - Not knowing your ideal customer profile.
Often small company owners have difficulty identifying their potential clients. As a business owner, you need to learn how to find your target market. This is non-negotiable, yet it appears to be one of the most difficult things to do for many business owners.
Your ideal customer is one who is most likely to purchase and use your products and services. How then do you recognize your ideal customer profile? To identify characteristics of your ideal customer, you need to start with data you already know about them. This may include but is not limited to:
- Marital status
You also need to review data from your customer management software and their purchase history. This data will help you know your ideal customers.
Ways to find your ideal customer profile:
- Conduct surveys for your customers on-site, by mail or over the phone.
- Pay attention to what your customers say on social media platforms.
- Monitor your business’ online ratings and reviews provided by customers.
- Endeavor to talk to your customers on-on-one.
10 - Not building a support system.
Your company's sustainability needs you to be a stable and successful leader. To become a successful leader, you need to take part in mentor programs. Having a mentor in a similar business is a great way to achieve success, as your mentor was once just like you—a small business owner wanting to succeed.
It has been established that a single person can’t oversee all the affairs of a business. Trying to do it all will make you fall into mistakes too many small business owners make. With a support system in place, you have countless capable individuals to support you in your enterprise. Even with a ton of help, you still remain the boss of your business.
When you delegate work through a support system and allow people to help you, you are doing your mental and physical health a lot of good. Statistics show that allowing people to help you reduces your risk of exposure to high blood pressure, gives you a sense of satisfaction and increases longevity.
Determine if there is a market for what you plan to sell before you start a business. Remember, "everything" isn't a business. You must have a recognizable customer base that can be reached with marketing dollars.
New business owners also lack specific industry and management skills in fields of finance, marketing, sales, manufacturing and recruitment. To address the issue, small business owners should learn skills they do not have, recruit professional staff or outsource jobs. By doing all of these, you will avoid most of the mistakes small business owners make.