Owning and running a small business is a roller coaster ride with ups and downs as challenges and successes come your way. Most entrepreneurs march through uncharted waters and self-correct as they go along, knowing that mistakes are essentially inevitable. However, you don’t have to fall into all of the typical entrepreneur traps—here are five common mistakes and how to avoid them:
- thinking big. Small business may start small, but that doesn’t mean they have to stay that way. According to experienced entrepreneurs and investors, the biggest challenge small businesses face is thinking big and being able to compete with larger, more established competitors. After all, a small business that is content to operate comfortably in its little sphere won’t achieve much success and could burn out eventually. To avoid this mistake, form strategic partnerships on a local level before moving to a larger stage. Find investors, mentors, or partners who share your passion and who have the drive and resources to help your business succeed on a larger scale.
- Paying attention to the numbers. One of the most important aspects of running a small business is understanding the accounting and financial side of things. Investors won’t want to give you money if you don’t have accurate financials and guidance for upcoming growth. Everything your business does comes back to the numbers, so pay attention to them and make them an important part of your daily routine. Even if you are more focused on the big-picture strategy for the business, never stray from the numbers. If needed, find a trusted financial advisor or accountant who can keep you in the loop while being the one who does the daily number crunching.
- knowing the customer. You might have a great product or service, but it won’t be successful if you can’t reach the right people. Start by doing research about your target audience to gain a better understanding of who will purchase your product and why. From there, look for ways to reach them and consider the messages to use that will best appeal to their self interests and make them interested in your product. Keeping an eye on your customer doesn’t stop after your business launches—stay up to date on who is entering your store or website with people counting software and pay attention to what they are saying online and via social media. Without customers, you won’t have a business, so pay attention to their habits and responses and adapt your business plan to meet their needs.
- Staying cool. Running a small business has a way of humbling people, but it can be tempting to get a big-headed ego with your first bit of success. Making a big sale, landing a great investor, or signing a firm deal are all milestones for your business, but don’t let that be the high point of your entire endeavor. Use your success to drive your passion and hunger for further success. If needed, surround yourself with people who can bring you back down to earth after big moments and remind yourself that there are other small businesses that are having even greater success.
- planning. Every entrepreneur knows the importance of a strong business plan, but that plan needs to be adaptable and not set in stone. Too many entrepreneurs get caught up in perfecting the details of their plans that they never actually put things into action, or by the time they do, it is too late to capitalize on a great opportunity. Setting goals for your business is a great way to drive motivation, but goals that are too solid and that can’t adapt as plans or situations change can lead to failure and be a big loss for the company. There are many things you don’t know when you start a small business, and learning them along the way is an important part of growth. If you are so tied to your original plans that you miss a learning opportunity, your business likely won’t have the flexibility to succeed in the long run.
Running a small business is full of learning as you go, but following these tips can help you doing the right things.