6 Common Mistakes to Avoid as a New Business Owner
You’re a new business owner. You’re passionate about your company and determined to reach success at all costs. These are essential qualities to possess as an entrepreneur. However, if you’re not careful, relying too much on your enthusiasm can cause you to overlook critical aspects of running a business, such as planning and strategizing.
If you want to put yourself in the best position for long-term success, you must be prepared to be patient, work hard, and dedicate yourself to growing your company at the right pace. And you must avoid making certain mistakes that too many entrepreneurs before you have made. Sam Marcum shares six of these mistakes and how you can prevent them:
Trying to Do Everything Yourself as a New Business Owner
As an entrepreneur, you’re probably pretty self-reliant. That’s good, but you don’t ever want to think that you can do it all yourself. If you want any chance of your company growing, you’re going to need help. Focus on what you’re best at and what you enjoy, and hire other people to handle everything else.
Choosing the Wrong Business Entity
The entity you choose for your business is critical, as it will impact the taxes you pay, your personal liability, and many other details. Too many entrepreneurs either pick one that doesn’t serve their interests or neglect to establish one at all. Just be sure to research and seek advice from experts before forming an entity.
Being Unprepared for Payroll and Accounting Tasks as a New Business Owner
Payroll may not seem like that big of a deal—until you’re actually running payroll for a group of employees. It’s a complex process that deserves great attention to detail, and if you fail to develop an efficient process, it can severely harm your business.
Fortunately, there are tools for payroll that can make the process easier and less stressful. Look for software that integrates with your payroll services and helps you stay organized through features like automatic calculating, tax filing, and payroll scheduling.
Just as important is keeping track of your books and understanding exactly how much you’re spending and earning. When it comes to accounting, you typically have three options: Utilize accounting software, hire a professional, or manage your own bookkeeping and accounting. If you choose the latter, you may want to earn a degree in accounting to learn how to make better business decisions and evaluate your financial statements. Online degree programs offer busy entrepreneurs the opportunity to learn at their own pace.
Failing to Create a Business Plan
Having a good business plan drawn up is essential for securing funding and guiding your first few moves as a business. But the process of creating a plan is perhaps where the most value lies. Making a business plan will force you to dig deep into why you’re running the business in the first place, assess your market, and adjust your strategies so that you can put your company in the best position to succeed long-term.
Failing to Create a Marketing Strategy
Similar to your business plan, developing a marketing strategy will significantly impact your success. If no one knows about your product or service, then it doesn’t really matter how good it is. Make sure you take the time to create at least one target customer, and explore methods and tools for bypassing the competition to reach them.
Spending Too Aggressively As a New Business Owner
This is a common mistake spurred on by the enthusiasm we referred to earlier. You must be patient. No business succeeds overnight. In fact, it’s common for new companies not to earn any profit in the first couple of years. Don’t panic. Don’t buy a bunch of stuff you don’t need just to make your company look further along than it is. Spend conservatively, and build up a reserve for future setbacks.
Patience, hard work, dedication—these are the keys to growing a healthy, thriving company. Remember the mistakes above that so many new business owners have made, and resolve not to make them. Finally, remain teachable (here are 45 Life Lessons) and open-minded to other steps you can take to position your business to flourish long-term.
Tags: 45 Life Lessons, Leadership, New Business Owner