5 Small Business Mistakes You Can’t Afford to Make and How to Avoid Them

No matter how good your business idea is, without proper planning and good management, you can make a mistake that could ruin your business. 

Many small businesses failed due to naive mistakes that could have been avoided. About 21% of small businesses fail within the first year. That’s a lot considering that about 627,000 new businesses are created every year. 

To help you identify and avoid serious business mistakes, we have created a list of them. Here are the small business mistakes you can’t afford and how to avoid them.

Lack of Planning

Poor planning or a complete lack of a business plan is one of the quickest roads to failure. Having a plan in place when you’re just starting a small business is crucial because it serves as a guide. Without it, you’ll make hasty, uninformed decisions and fail to grow your business. 

Your business plan should guide you through each stage of the development of your business. It can be simple or comprehensive, but it should contain the key elements of your business. 

Of course, hiring a professional to set up your business plan is the faster way to go but you can also do it yourself. You can find an abundance of tips for writing a business plan.

Insufficient Market Research

One of the most common mistakes that you simply can’t afford is not conducting market research before you launch your small business. You’ve invested time and money into your business idea, the last thing you need is to discover that there’s really no need for your product/service. 

Yes, asking your friends and family members what they think about the idea is great, but it isn’t enough. Thorough market research involves defining the target market, researching competitors, determining whether there is an actual need for your product or service.

You should have an idea of who your ideal customer is before you spend all your money on a business that might not be viable.  

Ask yourself who are your potential customers and what do they need? Does your product or service solve their need? Why would they buy your product? 

How does your product/service fill a market need?

Not Hiring an Accountant

Too many business owners neglect the accounting aspect because they’re either too busy or they feel that their business hasn’t reached that stage yet where they need an accountant. But this is rather short-sighted. 

You need help from an accountant from the moment you set up your business. This doesn’t mean that you have to hire a full-time accountant. On the contrary, you can find a part-time accountant or use an accounting software tool. Later, when you can afford it, you should hire a full-time accountant. 

If you ignore your accounting from the start, you will soon find yourself in financial trouble, experiencing cash flow issues in particular. Try to educate yourself on accounting elements so that you can understand the basic concepts. You don’t have to become an accountant yourself, of course, but learning about these things will benefit both you and your business.  

Not Having a Website

It may sound unbelievable that in this day and age, 64% of many small business owners do not have a website. This is a very serious mistake given that most customers will first google a product or service before they make a purchase. Additionally, they decide whether to buy from you based on the information they find on your website as well as their user experience. This is one of the first steps you should take nowadays.

Your website represents your business and the better the website, the more audience it will attract. If you fail to set up a responsive website and publish high-quality, useful content from the start, you’ll have a hard time trying to compete with the rest of the businesses in your niche. 

Don’t put this off. Hire a web designer to create an appealing website for you right away. Or if you can do it yourself, that’s fine too. 

Underpricing Your Product/Service

Offering prices that are much lower than what the competitors offer is one of the most common ways business owners try to attract customers. However, be careful. This has led many businesses to fail.

Underpricing your products or service means that you won’t be able to make a profit. And you need profit to survive. 

Yes, the competition is fierce but there is no point in offering prices that you can’t afford. Think about the value you can offer instead while still pricing your product/service accordingly. 

Bottom Line

Even with this information on small business mistakes you can’t afford, you are still bound to make some mistakes. And that’s OK as long as you fix them promptly and have a back-up plan in place. After all, learning from your mistakes is a valuable experience that you can use to succeed. 

 

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