To be one of the few who turn a small business into a thriving empire, you need to start with a strong foundation and learn how to recover from mishaps. Here are five frequent mistakes and how you can prevent them.
1. Not Doing Enough Research
Don't jump into an opportunity just because you're excited about the possibilities. Even if the market for a particular industry is hot, your area may be saturated and require extra work to gain market penetration. Consider the cost of establishing a name in industries where long-time players already have a foothold. A business coach can help you analyze the lay of the land.
Another excellent foundation for avoiding the traps many other business owners fall into is returning to school and obtaining an advanced degree. While an MBA isn't a requirement to start your own business, jumping into a new venture without a comprehensive knowledge of how a business functions can be as disastrous as trying to repair automobiles without understanding how engines run. You're more likely to succeed when you better comprehend marketing, statistics, accounting, and strategic business planning. An online program affords you the time to care for your family and work while finishing your schooling.
2. Working Too Much
Recognize the point in the work week of diminishing returns. Too much time focused on the business can decrease your earnings per hour. Studies on flow state and peak productivity show that top performers in various fields need time away from their craft to improve their ability. Schedule time into each day for quiet reflection and keep at least one day a week where you can relax and rejuvenate. If you don't have time for vacation, you don't have time to run your business.
3. Not Identifying a Niche
One adage states that cure-alls cure nothing. People want to be treated as special and part of a unique community. Becoming ubiquitous is like catching lightning in a bottle and only happens for brands that go unexpectedly viral or massive, well-established companies. You'll find a more loyal audience of repeat customers by touting the individuality of your brand.
4. Investing Too Little Into the Company
Skimping on time-saving tools and technology has been the death knell of many corporations. Cybersecurity and identity theft protection can avert countless hours of operational inactivity because of an attack. Inventory management and project management software keep things organized in one place and speed up communication among your team, helping you to deliver results quickly and boost profits. Before you turn down purchasing a piece of technology because of its cost, calculate the hours it saves you. Figure how much your time is worth per hour and see if the product puts you ahead.
5. Pricing Poorly
Many new businesses set prices too low to capture market share, and the team becomes overworked and underpaid. If someone familiar with your service tells you your price is too low, believe them. Pay attention to industry supply and demand, then strategically offer sales and special deals. If you're not getting business because your prices are too high, realistically assess where you need to cut costs or how you can add value through services and partnerships to give clients their money's worth.
Many entrepreneurs make these errors, but the good news is you can rebound from them by recognizing the problem and addressing the issue head-on. Better still, position your company to endure by preparing to dodge these blunders before launching.
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ABOUT THE AUTHOR: Mindy Bartley is a former community college business instructor. Today, she is a consultant who also dabbles in e-commerce startups. She created Startup Steps to bring her business knowledge to a wider audience, build a community of entrepreneurial-minded souls, and help connect first-time entrepreneurs with experienced mentors.