Starting a small business can be incredibly rewarding, incredibly exhilarating and sometimes … incredibly complicated.
With so many details to oversee and so many plates to keep in the air at once, it can be easy to make mistakes, both big and small.
Take a look at the six most common mistakes that plague many new business owners and check out our advice on how to avoid falling victim to them.
Mistake No. 1: Putting all your eggs in one basket
Relying too much on one “big” customer can be a business-ending mistake if that customer ever decides to take their business elsewhere, or if that customer goes out of business. It’s always best to make sure no single customer or client becomes a disproportionate part of your billing.
Mistake No. 2: “Winging it”
There’s a lot to be said for remaining agile. Being a small business with an ability to pivot, change gears or capitalize on sudden opportunities quickly — often before your bigger competitors can catch up — is a wonderful asset.
On the other hand, not developing a well-thought-out business plan or continuously changing directions can create headaches by never giving you the opportunity to establish expertise or build a reputation in your field.
Don’t be so rigid that you can’t adapt as circumstances warrant but stay true to your business plan and make adaptations within it.
Mistake No. 3: Refusing to ask for help
Asking for help isn’t a weakness. In fact, being able to draw on the expertise and experience of others — like a mentor — is what sets many of the most successful entrepreneurs apart from the rest.
You already have plenty of work to do on the high-level aspects of your business. It makes sense to delegate other tasks to people who specialize in them — hiring an accountant to do your taxes, for example, or retaining a marketing firm to handle advertising.
Similarly, there will be times when you come up against issues that you simply can’t work through on your own. At times like these, a mentor or trusted advisor is worth their weight in gold.
Mistake No. 4: Not preparing for your business to operate without you
One of the first goals of many entrepreneurs is to get their business to a point where it can run without them. That means putting tested systems in place that can function without constant oversight and supervision, and that don’t rely on any one person — including you — to operate.
Think about what would happen if you were to get sick or needed to step away from your business for any length of time. Would it survive? Or would your absence cause it to crumble? Strive to “work on your business, not in your business,” as the saying goes.
Mistake No. 5: Working with unstable suppliers or becoming too reliant on a single resource
As with customers, it’s never a good idea to rely on a single person or company for every resource your business needs.
On the flip side of losing a single large customer that would put a financial strain on your business, is relying too heavily on a single supplier to reach a key market or to provide materials necessary for your business to operate. Always ask for customer references and work with multiple suppliers whenever possible.
Mistake No. 6: Not taking rules and regulations seriously
Most entrepreneurs aren’t fans of overly complicated paperwork or excessive rules. That’s completely understandable.
The fact remains, however, that you could be putting your business at serious risk if you ignore or fail to adhere to important regulations and laws, especially the ones that govern your industry.
To avoid being blindsided by financial penalties (or worse) when you least expect them, make an effort to ensure you’re on the right side of the compliance fence when it comes to local, state and federal regulations and laws.
Have more questions? Reach out to SCORE Indianapolis for free, expert mentoring and resources to guide you. Visit score.org/indianapolis/local-mentors to learn more.
