5 mistakes to avoid when building your small business

In my years helping small business start-ups, I’ve seen the same mistakes repeated over and over again. Many of these mistakes are the same ones I made with my first business two decades ago. They are really easy to avoid for entrepreneurs just starting out who are willing to learn the secrets and shortcuts of other successful entrepreneurs. With each one, I’ve included the reason behind the error and how you can avoid it. Depending on where you are in the startup process, use this information to avoid unnecessary struggles and wasted time and money.

1) No business plan

Before you start your business, you need a simple, written business plan, even if you’re on your own. The plan should explore:

Your products and services

Your price

Your projected gross income for the first year

All your projected expenses

Your market study

Your marketing plan and budget

Your projected gross profit (profit before taxes)

You need these plans to be in control of your business; Otherwise, your business runs by default and you end up spending money with no clear strategy. Many small business owners don’t have written plans because they think writing them will take too long. Those who do, succeed. Why not join them?

2) Lack of funds

Even if you are starting a home business, you need some money to get started. If you plan to hire employees, buy inventory, and lease space, you obviously need startup capital, but you may underestimate how much.

For a small home service business, you’ll need office furniture and supplies, marketing and branding materials, a strategically planned website, some technology (software), and a healthy marketing budget. If you’re bricks and mortar, you’ll also need money for expenses like equipment, supplies, six months’ rent, payroll, etc.

To avoid underfunding, check your business plan. How much money do you need? Financing is available from many sources: family, friends, personal savings, credit cards, home equity loans, independent small business loans, the SBA, and Prosper.com. Calculate how much you are willing to invest in yourself. What are you telling others if you are not willing to invest in your own business? If you set a budget and come up with a smart plan for how you’ll spend that money to launch your business, you’ll get the results you want.

The next mistake is often made by underfunded startups.

3) Amateur Marketing Materials

Don’t hire the first graphic or web designer you meet. Worse yet, don’t trust your business’s marketing image to high school or college students because you’re trying to save money. How you are perceived in the world will largely depend on your business graphics, logo and website. It’s important to think about how you want your business to be perceived, what colors will reflect that image, and what marketing materials you really need. Sure you need business cards. But do you really need letterhead and envelopes? Not everyone does. Do you need a brochure? Uniforms? Signs? How will all this work together to present a unified image?

The key again is planning. Look carefully at the work of any graphic designer you’re considering using. See if you really connect with him. Talk to a minimum of five professionals, compare price and style before deciding. Ask for recommendations from other companies that have a “look” that appeals to you. Finally, don’t skimp on your marketing materials. They represent your business.

4) Weak website

The wimpy website is usually made by a new web designer who can create something nice and charge you very little. The website sits in cyberspace collecting cyber dust and you end up disappointed because it doesn’t generate any leads or sales.

You need to do a lot of research before you start building your website, such as keyword and domain name research. Writing content that is engaging for visitors and optimized for search engines is key. It is also important to build a map of your website with all the navigation options well thought out. I discourage clients from building their website until they understand the tactics that will make it a lead magnet and profit center in their business. I’m sure you don’t want to waste hundreds, even thousands of dollars on a website that doesn’t give you a return on investment.

5) Poor time management

Our goal is to become entrepreneurs because we want to be our own boss and be in control of our lives. But when we start, we suddenly realize that no one but us is structuring our time each day. Many startups have told me that they work all week and can’t seem to accomplish anything, or sit at their desks not knowing what to do next.

If you have a clear vision of where you want to be in a year and a detailed roadmap on how to get there, you just need to follow the instructions! It’s easy to get distracted by daily tasks or new ideas and opportunities. Set aside time each week to review these opportunities and see if they serve your vision. If not, file them away in a future ideas folder and stay focused on those priority activities that will grow your business now.

Being a smart startup; Get ahead of the curve by avoiding these discouraging and costly mistakes. You’ll experience less stress, reduce the first-year learning curve, and increase your bottom line.

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