Starting a new business can be full of many highs and lows. It can bring plenty of disappointment and by not being strategic and organised you can often make some expensive mistakes. Here is a list of common mistakes that new business owners make.
Not Having a Marketing Plan
You need to put together a strong marketing plan so that people can find out about the existence of your business. In your marketing plan you need to identify who your desired customer and target audience is and decipher how you can grab the attention and appeal to people who belong to your desired target demographic.
Due to the way Search Engine Optimisation works, people have a better chance of finding you if your content is relevant to them. Ask yourself are you targeting, and what words are they using when they go online and start searching for products or services? What are their interests? What are their struggles? Which social media platforms do they use the most? Are they using Instagram or YouTube or Twitter? How do they like to consume content? Would they rather listen to a podcast, watch a video or read a blog post?
You need to ask yourself what are you trying to achieve? This will help you better understand where you need to spend marketing effort. Do you want to drive more traffic to a website? Do you want a better conversion rate? Are you trying to create more brand awareness? By knowing exactly what you are trying to accomplish will make it easier for you to figure out the appropriate marketing strategy.
Spending Too Much Money
Many small business owners get into trouble because they fail to keep their costs under control. During the early days of your business, it is strongly recommended that you are conservative with your spending habits.
You need to keep an eye out for budget-busters such as an office or retail space that’s too large or expensive, nonessential employees, and more or expensive equipment than you need to use.
You need to be mindful of taking on debt. As a new business owner, you will most likely need to sign a personal guarantee on the amounts of money you decide to borrow, so you will remain responsible for paying those debts even if your business fails.
Under-Pricing Your Products and Services
Under-pricing your products is a very common way many business owners lose money despite working hard.
New businesses often under-price their products or services either because they are trying to get more business by undercutting the competition, or they have failed to do their homework and don’t realise that they should be charging more money. When you don’t charge enough, you may not even be able to cover your overhead.
Mixing Personal Finances With Your Business Finances
This is a significant mistake that business owners need to avoid making. When you are running a business it is natural to assume that the organisations assets are also your own assets. Although this might be the truth to some sort of degree it can also result in horrific financial problems if you begin treating business finances as if they are your own personal finances.
An example of when this might become problematic would be if you put yourself at risk of missing out on valid tax deductions when you mix your business and personal expenses in the same credit card and the same bank account. You need to be careful and take caution.
Trying To Do Everything on Your Own
Most business owners believe that they should do everything. They believe that the only person who know how to get things done correctly is themselves. While it’s true that the business owner will know more about their business than anyone else, you need to distribute some responsibilities to other people as your business grows so that way you can save more time and focus on the more important tasks.
As a business owner, there are numerous areas you’re not good at. For example, handling customer service calls, social media, or managing taxes if you are not qualified to do so.
You need to identify your strengths and weaknesses. Once you have done this you need to hire people who are good at doing all the things you are not good at. That will enable you to spend your time doing things that will allow you to add the most value possible.
You should also hire advisors who are experienced and trustworthy to discuss your business strategy, growth, and challenges. These advisors will become a huge asset to your business as they will give you plenty of feedback to reduce the risk of you making plenty of mistakes related to your business.
Being Impatient And Expecting Quick Results
It is important to acknowledge that a large number of small businesses don’t earn much profit during their first two years of operating. If you find that your business fails to make much revenue in it’s first two years don’t feel too discouraged to quit as in most cases businesses take time to flourish. The first two years needs to be spent developing your brand and establishing a loyal group of customers.
Even if you do find yourself becoming incredibly successful in the first two years of operating it’s important to not get too ahead of yourself and expect everything to be smooth sailing. Sometimes there will be times when your sales tap a dip and consequently you might start to question the future of your business. It is important to be patient, be optimistic but at the same time don’t be naïve and know when it is appropriate to close your business if it looks like your business isn’t going to become a long-term success.
The Team at Vault is here to help, offering a full range of financial products to assist you with your financial objectives. Contact the Team at (07) 3012 6724, email us at firstname.lastname@example.org or use the chatbot below to schedule a meeting.