No matter what your passion, almost everyone has entertained the idea of owning their own business at some point. The idea of setting your own hours, answering only to yourself, and making a living by your own business savvy has a powerful draw. For those bold enough to strike out on their own, the road to running a successful business is filled with triumphs and failures. There is no one right way to run a business. But there are reoccurring patterns that show up in businesses that succeed and common pitfalls that cause companies to fail. These four mistakes are some of the most common mistakes small business owners make.
1. Waiting for Your Customers to Come to You
Marketing and advertising can seem like a big expense for a startup company, but it should be looked at as an investment, not an expense. If no one knows you’ve opened up a brand new shop, how can you expect anyone to visit? Your marketing campaign doesn’t need to rival the efforts of million dollar companies and you don’t need to start planning for a Super Bowl ad. However, you need to do something to get the word out and get in front of your target consumers.
2. Not Having a Business Plan
Sometimes it’s easy to get caught up in the excitement of running our own business. If we’re lucky enough to work in an industry we are passionate about, we may think that our own expertise will be enough to make a business succeed. But just because you’re a successful baker or brewer doesn’t guarantee the business will thrive and grow. In addition to knowing the ins and outs of your craft, you need a plan for running the business. You’ll need a plan for raising capital, hiring and managing staff, balancing books, paying salaries, keeping the lights on, and much more.
3. Expecting Customers to Think Like You Do
You may love zebra print steering wheel covers, but, if that’s all your auto parts store stocks, you’ll be out of business before you need an oil change. It’s great to be able to work in an industry you’re passionate about, but it can also be difficult to put your own personal preferences aside and focus on what will sell. It’s important to remember that, at the end of the day, it’s about what the consumer wants.
4. Cutting Marketing Costs Based on Success or Available Revenue
Advertising and marketing are often the first things to be cut when money gets tight. Unfortunately, making cuts to your marketing effort can lead to a vicious downward spiral. Cutting the marketing budget leads to fewer sales which leads to the need for more budget cuts. And, if the ad budget takes another hit, the cycle will continue to repeat. On the flip side, when business is thriving, owners will sometimes pull back on marketing efforts to focus on the job at hand. But once the current project is complete, a business can be left with an empty pipeline and scrambling for work.
There is no singular way to run your own business. What works for the bakery down the street might not work for the bike store that deals mostly online. These four pitfalls are by no means all-inclusive of the problems a business owner may encounter, but they are some of the most common problems and the most easily fixed!