As a business owner, you’re worried about making the wrong decisions. There are many challenges that you may face, especially in the beginning, but by recognising your problems, you can navigate your way to a thriving business by working out ways to avoid them.
Being an entrepreneur is exciting, but it can also be overwhelming, in this blog post we want to discuss some of the common mistakes that small business owners make so that you can avoid and prevent them.
1. Making unrealistic projections
It’s great to be optimistic, being positive is a valuable strength when you’re a small business owner and let’s face it if you were pessimistic you wouldn’t have started in the first place!
However, being overly optimistic can also set you up for disappointment in certain situations. Ensure you are still being realistic when making cost and revenue predictions so that you don’t run into any unpleasant surprises down the road. To avoid unrealistic predictions, forecast revenues with both a conservative view and an aggressive view and check key ratios to make sure your projections are sound and your assumptions aren’t unfounded.
2. Not checking legal permissions
Infringing on another company’s trademark can land you in a legal mess very fast with a stack of bills and an impact on your business's future. Ensure your business name and products are trademarked. Check the name you want for your business is available on Companies House before printing it on cards and plastering it on social media.
3. Having no clear plan
Not having a proper plan in place makes it very difficult to organise resources, time, and money efficiently leading to unnecessary waste and unwanted surprises. To avoid this, set out the basic objectives for the next 12 months with the metrics you plan on using to measure them. Be sure to keep copies of your plan and remind yourself often to help keep track and save yourself from a lot of stress.
4. Trying to do everything yourself
Becoming an entrepreneur doesn’t mean it has to be a solo job, many small business owners try to operate independently without getting any help which could lead to burnout and failure to complete important tasks. Finding trustworthy advisors and freelancers to discuss your ideas, strategy, challenges, and progress will help you in your journey. Look into hiring employees to join your company to take some of the workload off you and allow yourself to accept help when needed.
5. Overpromising
It’s often hard to say no as a new entrepreneur because you want to prove that you are capable of meeting needs but it’s important to not overstretch yourself. Overpromising can quickly lead to the inability to deliver which in turn will harm your business. It is far better to tell potential clients that you are unable to take on their project this month or let customers know when there is a busy period to lower expectations. Communicating well with your customers is much better for your business than giving false promising which could lead to negative reviews.
6. Not putting everything in writing
Disagreements and broken deals can occur often in business, regardless of the kind of relationship you think you have with suppliers, employees, and customers, it's essential to have everything in writing to act as insurance in case you ever need it. Although we often think of getting things in writing when it comes to legal matters like sales agreements and employment contracts, day-to-day conversations are just as important because miscommunication can happen anywhere. To avoid this, ensure you keep sufficient records of your finances, keep receipts, try to email instead of having phone calls, record dates and times of certain conversations and ensure you are organised to save yourself from any disagreements in the future.
7. Not watching the competition
Many small business owners conduct market research before setting their business however, researching is just as important throughout your journey to ensure you always have good knowledge of your market. Monitoring your competition will allow you to see the threats in your marketplace and see if other products or services are being developed which you could sell or license before somebody else does. Being late to following trends or underestimating your competitors could cost you revenue. Ensure you are watching the competition by regularly searching online for similar products or services. Read press reports often, visit exhibitions, and trade fairs and check up on your direct competitors to ensure you stay prevalent in the market.
8. Having no space for criticism.
No one likes getting criticism and hearing negative comments but being open-minded could save you from making many mistakes in the future. Criticism when it comes to your customers and your market should be taken in and considered, after all, they are the backbone of your business and knowing their needs is vital. Think of criticism as a chance for growth and a way of saving yourself from any future issues. Look for constructive advice, think of what was said and how it could be used to make improvements. Check your social media and reviews to control your message and react well to negative comments. How you respond plays a big part in whether a customer will return so it’s important to be helpful and open-minded with criticism.
Lastly, don’t be afraid of making mistakes, mistakes help you learn to grow to become a success. We know it can be tricky to ensure you are doing things right, but we are here to help you. Here at Enterprise Orchard, we are constantly advising and supporting start-ups and small businesses.
If you are trying to grow your business and need advice, join our peer learning programme. The Engine Room is a community where you can talk to like-minded business owners to discuss concerns, achievements, and everyday business challenges.
It provides expert guidance through weekly Zoom sessions in small close-knit groups of 6. The sessions include expert-led masterclasses delivered every 3 weeks by our wonderful partners. This is your chance to be part of an engaged community of founders, delivering business growth and collaboration. To find out more please visit https://www.enterpriseorchard.co.uk/the-engine-room