5 Mistakes Many New Small Business Owners Make
Oops!
You never want to hear that word in any walk of life. But it’s a particular downer when it pertains to your new small business. That’s because most mistakes have a financial cost attached: lost time, lost customers, even lost cash.
But what if you could sidestep a few common pitfalls that most small business owners make?
Let’s be clear: Every small business owner is going to make a gaffe or two at some point. No one is perfect, and there are just too many variables to account for in a given day to get everything right.
But every mistake you do avoid is effectively some cash in your pocket. So the following are some of the most common business blunders you should what to watch out for.
5 Common Mistakes by New Small Business Owners
Mistake #1: Commingling Personal and Business Finances
Your new business’s printer breaks, so you head off to Staples to buy a new one. You forget your business credit card at home, so you charge the printer to your personal credit card.
Was that a business expense?
It was, of course, but you just made tax paperwork unnecessarily complicated for yourself. And that’s just one of the dangers of mixing your business and personal expenses.
Small business owners who commingle personal and business finances also risk greater financial liability should their business fail. They also risk robbing themselves just to keep the company afloat, creating a stressful financial situation that makes it even harder to lead effectively.
That’s why one of our top financial tips is to always keep your finances separated. Go back to the office and grab that corporate credit card.
Mistake #2: Skipping Your Homework
“We offer the best IT support services in the world.”
It sounds nice. It certainly sounds comfortable to a customer. But … do you provide the best IT support services in the world?
If you haven’t done any market research, chances are, you couldn’t even put forth an educated guess. Moreover, if you haven’t done any market research, you might not have any idea about what your customers actually want, and you might not even know how to talk to those potential customers.
Yes, research can be downright dull. But it can also make you a much more competitive company.
Mistake #3: Not Having a Financial Backstop
Some mistakes might cost you a few bucks here or a few hours there. But one particular gaffe could be the difference between business life or death.
Businesses don’t operate in a vacuum. While the U.S. economy grows far more often than it doesn’t, recessions do happen. And even when they don’t, certain industries can be upended by disruptive companies and new technologies.
A long way of saying: If you don’t have an emergency fund, to help you stay in business when times get tough, you could be dooming your business to a quick, unceremonious exit during the next economic downturn. Set aside a little each month into a rainy-day fund so you’re never caught unprepared.
Mistake #4: Trying to DIY Everything
No one is a specialist in everything. No matter how brilliant you are, chances are you have some sort of weakness — and that weakness could eventually jeopardize your business.
Yes, at the very beginnings of starting your small business, you’ll probably need to “wear many hats.” But the way to growth isn’t spending an increasing amount of hours trying to get your business ahead — it’s bringing on people who can do what you can’t and help grow the business for you.
Even then, it’s not enough to just hire new employees. You need to trust them to do what you’re hiring them to do. Micromanaging will actually dilute the effects of hiring for growth.
Mistake #5: Not Asking for Help
Along the same lines, it’s OK to admit that everything isn’t going perfectly — and reach out for a little help. Sometimes that might involve asking employees for fresh perspectives on parts of the business that are flagging. And sometimes, that might even involve reaching out to an experienced third party.
McManamon & Co. can help. Our business experts have decades of collective experience, and they put that experience to work via consulting services to small and midsize businesses. We can help with a range of issues, from strategic planning to cash flow optimization.
Learn more about what we can do for you. Call us at 440.892.8900 or contact us online today.
Tags: McManamon, small business, small business mistakes | Posted in McManamon & Co., small business, Small business finances