Running a small business is a big job. When people start a business, they often have great ideas but struggle with making them happen. That’s why it’s important to know about common mistakes small business owners make. Knowing what not to do can give you good ideas about what you should do for both short-term progress and long-term success. Here are some mistakes that business owners often make:
- Not having written contracts
- Relying on poorly-designed partner or investor agreements
- Failing to realize how many government entities regulate different aspects of running a business
While it’s hard to list every mistake, here are 10 common areas where problems can occur:
- Not Taking the Time to Plan Before starting your business, take the time to plan by doing market research, creating a business plan, filing for the proper legal structure, and buying the right types of business insurance.
- Forgetting to Set Goals for Your Startup Have both short-term and long-term goals for your business that are Specific, Measurable, Achievable, Relevant, and Time-based.
- Trying to Do It All by Yourself Successful entrepreneurs know they can’t do everything alone. As your business grows, consider expanding your team by hiring partners, employees, or essential advisors.
- Skipping the Contracts Create clear, professionally written contracts with your employers, vendors, and investors to avoid legal problems.
- Overspending or Underspending Keep a budget for your business to track cash flow and expenses like payroll, office supplies, advertising, and materials.
- Forgetting About Financing Research financing options such as business loans, personal financing, credit cards, or investors to help with your business’s cash flow.
- Not Marketing or Advertising Create a marketing plan and use social media to promote your business while being aware of federal regulations related to marketing and advertising.
- Undervaluing Your Product or Service Ensure you’re pricing your products or services correctly by comparing them to competitors and understanding their value.
- Not Protecting Your Intellectual Property (IP) File the correct paperwork for trademarks, patents, or registered names and work with an IP attorney to address any IP-related issues.
- Losing Focus Stay focused on running your business by setting and monitoring goals for both short-term and long-term success.
By avoiding these common mistakes and focusing on what’s important, you can increase your chances of success as a small business owner.