Posted by Sherre Webb, Mindset Coach, Author, Solo-Entrepreneur Consultant, and Owner of Sherre Webb Life Coaching and Reality Check Publishing
Getting involved in business can be lucrative and fulfilling, but whether you’re new to the industry or a seasoned entrepreneur, it’s easy to fall victim to common mistakes small business owners make. Sherre Webb recommends watching out for these five pitfalls and avoiding them to put your best foot forward.
1. Not Having a Business Plan
Business plans are often misconstrued as always being extensive and formal, but they don’t need to be. A business plan, no matter the length, simply serves as the roadmap for your business’s future. It can be as little as a few pages, but it should have all the foundational information: a company overview, detailed descriptions of goods and services, marketing strategies, and budget plans. An informal business plan can serve as the baseline for a more thorough document later on.
Get into the habit of adjusting your plan via writing. Not only does the mere act of writing your plan down help you clearly define your goals and generate motivation, but the final document can also help secure funding. Financing is often a necessary step for small business owners, and investors will judge your worthiness based on your plan.
2. Lacking Education
You may have excellent ideas, but without the proper business sense, those ideas cannot come to fruition. Having the right education can help you run your operations optimally, grow your business, and avoid costly mistakes. Consider an advanced business degree to learn the most important business skills such as data analysis, management, and, most importantly, communication. To establish good business relationships with vendors, customers, and employees, you’ll need to learn how to effectively communicate.
3. Choosing the Wrong Business Entity
There are a few different business structures that dictate your operations, taxes, and liability. Sometimes, those who rush into business don’t choose the right structure for themselves, and switching business structures can have harsh complications.
If you are a low-risk business owner testing out the waters, a sole proprietorship may be your best option. An LLC can protect most of your assets should your business fail, but if you want your business to be a completely separate entity from you, a corporation could work. Partnerships are also an option for those who go into business with one or more people. Take the time to research the implications of each business structure before choosing one.
4. Not Regularly Analyzing Your Business
Frequently analyzing your business’s role in the market ensures that you understand your business through and through. One easy way to do this is to conduct a regular SWOT analysis, which helps you identify your strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are fairly easy to identify, but opportunities and threats refer to external things that are out of your control. Being proactive and identifying them can help you strategize, thus allowing you to grow your business.
5. Forgoing Company Culture
Company culture isn’t just about listing values. It’s about living by example, exhibiting expectations of behavior, and making the workplace feel like a community. Its importance is undeniable, as research shows that 66% of job seekers list company culture as a deciding factor in accepting a job offer. You can boost company culture by involving your employees in decisions, whether through SWOT analyses or via delegation, which increases efficiency and strengthens co-worker bonds. Make the most of your entrepreneurial spirit by avoiding these five common mistakes. Arming yourself with the proper knowledge, planning, and team can help bring you great success.