As a new small business owner, it’s an intimidating thought to realize that more new companies fail than succeed within the first two years. The fear can become so paralyzing that you end up making the same common mistakes of small business owners that ended up costing them the company. However, we encourage you to study these mistakes and vow to learn from them rather than repeat them.
Choose to Grow Slowly for Sustainability
When you have an exiting idea for a new product or concept, it’s understandable that you want to get it to market as quickly as possible. This excitement has caused many new business owners to rush through the early stages of business growth only to find that taking on too much too soon can have disastrous consequences. You could find yourself stuck with products you can’t sell and paying for overhead costs that you could have lived without until your business became more established.
Other Financial Errors
You may be able to recover from one small financial mistake, but several of them in quick succession could spell the downfall of your new business. For example, it’s a common mistake to use a personal checking account or credit card for business finances. Separating your finances from the beginning makes it much easier to track them as well as keep you organized when it’s time to file a tax return for your business. Other common financial errors include:
Spending start-up capital too quickly: You could find yourself out of money in a hurry if you use all the money you raised for start-up costs before your company has turned a profit. It’s a good idea to work with a small business mentor who can offer guidance on when to spend money and when to hold off based on his or her own experiences.
Not having any savings for unexpected expenses: Unfortunately, business costs are often more than you expect. If you don’t have a reserve on hand to pay for things such as materials and labor, you will have to go without those things and your business will not be able to move forward.
Inadequate Marketing Strategy and Not Understanding the Competition
Some new business owners are so optimistic about their new venture that they assume others will know about the company without putting in the effort to advertise. The good news is that it doesn’t have to break your limited budget to create a beginning marketing campaign on social media or through word-of-mouth advertising.
It’s also a mistake not to learn as much as you can about the competition. Study how they conduct business and treat their customers and then do whatever is necessary to outdo them. Keep in mind that it takes a long time to build customer loyalty and people won’t hesitate to go to the competition if you can’t give them what they need.
These are just a few mistakes to avoid as a new small business owner. Whatever your business launch needs, we’re here to help. Lowcountry Business Advisors, in Greater Charleston, SC, strives to use our experience and passion to help those who are starting a business achieve their goals. Let’s meet for coffee and see how we can work together.