Everyone makes mistakes: it is how we learn and grow. New business owners are no exception to this rule. Below is a list of the top 10 mistakes that nearly all business owners make, and tips for how you can avoid making them yourself.
1. Thinking too small or too big
This first mistake is one that can go either way for new business owners. If you think too small, you may lose a potential deal. This could be because you do not feel confident going-up against an established competitor. On the other hand, if you think too big you can wind up biting-off more than you can chew. It is important to remember how much your business can handle and to position yourself to support expansion.
2. Loosing your focus or drive
Too many new business owners get caught-up in the excitement of opening their own business and over work themselves too much, too soon. Upon not reaping immediate rewards, they are then too quick to drop the business venture. Remember that opening a new business is a long-term project and you need to stay focused. Yes, you are going to work long hours, but make sure to take breaks and not over exhaust yourself too soon.
3. Taking on too much by yourself
No one can do everything themselves, and if you try, you may end up losing your energy. It is always a good idea to seek the help of others. This can be through employees or professional services. That way you can focus your energy on your own goals and not worry about smaller details.
4. Sacrificing your personality
Your business is going to be an extension of yourself. As a business owner you will likely work long hours and when not working, you will probably still be thinking about business. In order to make this kind of commitment you need to love your business and know that it is part of you. If you sacrifice your personality to fit an image of what your business should be, then you will likely lose the drive that got you to open the business in the first place.
5. Not properly tracking advertising
When you are spending money to advertise your business it is important to how if your money is being spent effectively or not. There is no point in spending thousands of dollars for a billboard that never generates new customers. Whenever you purchase advertising always make sure you can track the return on investment so that you can allocate more money for those that provide a higher return.
6. Investing too much in one client
New business owners are often quick to rearrange their entire business structure for their first “big client.” Some people will even move their business location or develop new products for specific clients. While this is not necessarily a bad idea, make sure not to put all of your eggs in one basket. Not every client will last forever and you do not want to be forced to close your business if you lose your biggest client.
7. Going against your gut instincts
When you open a new business you always want to heed the advice of others. But do not let someone else’s opinion overshadow your gut instincts. You are the owner of the business and you need to trust your own ideas. You may not always be correct, but the mistakes you make will help you learn and grow.
8. Not getting involved in the community
Attending local events and becoming an active member of the community are great ways to get free attention to your business. Networking is an important part of building up good business relationships that can lead directly to customer opportunities. For more advice on participating in the community check out our recent article titled, “8 Ways to Help the Community & Promote your Business.”
9. Managing employees poorly
Poor employee management can be detrimental to a new business owner. Managing employees is not something that comes naturally to everyone, and creating bad relationships with employees can create serious problems for a business owner. For ten tips of properly managing employees, check out the first episode in our business tips video series.
10. Trusting that signed contracts will be honored
Although any document that contains an agreement and signatures is technically a legally binding contract, in order to enforce it you will have to go to court. This can cost thousands in legal fees and waste a new business owner’s valuable time. Business agreements are relationships that are based in trust. If you keep quality relationships with trustworthy clients then you will not have to worry as much about what is written on paper.
