Today’s post will cover many of the common obstacles small business owners face on their way to success. Follow these tips to prepare for them well in advance so you can sail smoothly into your first year of operations.
- Mistake #1: Failing to Acquire the Necessary Licensing
When you’re starting a business, you’ll need to cut through a lot of red tape before you can open your doors. You’ll need to find a lease, secure the location, conduct a health inspection, and confirm the building is up to code. You might also need special operating permits, such as in the case of selling alcohol or operating in a residential neighborhood.
The process can be rather time consuming and expensive, especially with tempting profits calling your name. But don’t cut corners, because once your local city or state regulatory agency finds out, you might face a major set back if you’re forced to close your doors until everything is squared away—not to mention the expensive penalties and fines stacked on top.
- Mistake #2: Forgoing a Business Plan
You might be eager to get your startup off the ground so you can begin making money, especially if the market is hot and time is of the essence. But before you go out with guns blazing, be sure to take the proper time required to develop a business plan that’s well thought-out.
How soon will you be earning revenue? How quickly can you flip a profit? What does your sales pipeline look like? These are all questions investors will want to know before they agree to any funding. And, looking at the big picture months down the road will help prevent your business from going under due to miscalculations.
- Mistake #3: Understanding Your Target Audience
A good business plan should identify who your target audience is, or in other words, what your ideal customer looks like. Are you selling organic baby diapers? Vegan meal kits? Industrial toolkits?
Once you understand who you’re selling to, you can adopt a data-driven marketing approach to ensure those ad dollars go to good work.
- Mistake #4: Make Contracts not Agreements
It’s tempting to give everyone the benefit of the doubt, but as a small business owner, you can’t take that risk. No matter how much trust your business partner or a returning customer, you should always make a contract to avoid any mishaps in the future. A verbal agreement with a handshake won’t hold up in court should someone refuse to pay you what you’re owed.
- Mistake #5: Staying on top of Taxes
Here’s another court you want to stay out of: the U.S. Department of Treasury. If you fail to keep up with your business taxes, you could end up in some serious hot water with the Internal Revenue Service (IRS). Tax penalties by the IRS can cost anywhere between several hundred and several thousands of dollars—which is no small number to your delicate bottom line.
- Mistake #6: Don’t Go at It Alone
You might think you’re Mr. (or Miss) Jack-of-all-Trades, but once your business gets in full swing, you’ll find yourself juggling all sorts of tasks with little-to-no time to spare. Details might begin to fall through the cracks, causing you to lose customers and hurt the business. If you’re reluctant to increase labor costs, just remember how much money your employees might be able to help you earn in the long run and, more importantly, the stress they can save by lightening your load!
- Mistake #7: Hire Wisely
If you put off hiring until the last minute, when you’re drowning in work without a light in sight, you might be tempted to bring on help as fast as possible. Don’t rush the hiring process though, because you might employ someone who’s not who they seem to be. Maybe they lack the experience they claim, or they have a past criminal history of fraud. In any case, do your due diligence by following up with past employers and professional references.
Their mistakes don’t have to be your mistakes. Be mindful of these common pitfalls and you’ll be well on your way to a startup that stays open for years to come.
