Starting a new venture is exciting. There’s so much to learn and lots to do.
Most small business start-ups make lots of mistakes in their first 2 years and that’s a natural part of the process.
But some mistakes can mean the end of your journey as a small business owner before you’ve even really begun.
How do you avoid these business killing mistakes?
Not all mistakes are the death knell to your business idea so don’t panic!
These mistakes are only fatal if you refuse to make tough choices, swallow your pride and fix the errors before they get too out of control.
1.Spending more than you earn.
Over committing yourself is pretty easy to do. Yes, you need to take some risks and invest in your business significantly in the first couple of years to get the wheels turning. But, in your excitement, it’s easy to spend money on things you don’t really need yet.
Do you really need a permanent office space to run your business? Or can you book meeting rooms as you need them, to create a virtual office? Maybe you can do admin tasks from a home office and then meet your customers in a professional co-working style space.
2. What subscriptions and systems do you really need as minimums to run your business?
There are hundreds of Apps and tools out there, but they all add up and most businesses don’t use half of the features they are paying for.
Be rational and evaluate what the essentials are and remove wasted subscriptions that are costing you time and are a distraction from your work.
3. Extra help.
Ideally you want to outsource everything not essential to your core business, but there is a time and budget for that – so, to begin, maybe you can’t afford to do that.
Key tasks (admin, bookkeeping, service delivery and marketing activities) should be carefully defined and then if you choose to outsource the role, make sure you are just paying for what you actually need now. If you don’t need 10 hours of Admin time and the minimum is 10 hours through a VA service, then look for another option that is a better match for your needs and budget right now.
4. Know all of your costs and income thoroughly.
You should have short payment terms, auto-payment reminders and visibility weekly of all Aged Debtors.
5. Manage your time carefully.
Avoid making FOMO decisions. You shouldn’t be at the opening of every envelope. Time you spend networking is part of your marketing process, but it can get out of hand. Work out where and when you will be most effective in your networking activities, so that it counts and yields a good return on the investment of your time.
It’s okay to say no and discontinue memberships that just don’t make sense now for your business. You can always re-join later, when the time is right for you.
6. Social media forums and marketing.
Participating in discussions on social media should be evaluated in the same way you evaluate networking face to face. If it doesn’t provide a return on investment for your business, you might be wasting your time, and possibly giving away valuable intellectual property. When it comes to social media and digital marketing, too many small business owners try to dabble and DIY it. Let’s be serious. Digital Marketing is a complicated science of algorithms and rules that change from week to week. Unless your business is Digital Marketing, DIY’ing it is probably an area you’re possibly wasting time and money on.
If this is a core way that your customers are going to connect or buy your services or product, then make sure you use a company that knows what they’re doing in this space. Or you could be putting budget into this, that is not optimised.
7. Getting Fancy.
One of the first things a lot of business owners spend money on is a logo (as opposed to a brand), letterhead, website, business cards and brochures or print materials.
Unfortunately, in most cases, businesses change their business name, logo and brand within 5 years as they evolve. So, if you spend too much making things look fancy, before having done a proper business plan, marketing strategic plan and branding strategy, you’ll probably end up spending twice as much on your branding.
Don’t over print and go crazy ordering pens and mugs and promotional material, unless you’re very clear on how you will distribute these (all of them) to your target customers and why they would keep the item on their desk.
Small business evolves quickly. You don’t need to run a company in year one that acts and spends like a 10 person business when there’s only 1-2 of you. Allow your business to change and grow in the right time.