Survey's show that 50% of small businesses fail within five years. It's tough out there, and owning a small business is no easy challenge - we salute all of you who are willing to take the chance on running your own business and make it big.
So, what can you do as a small business? Here are five mistakes that we've seen our businesses makes - and some tips on how to avoid them:
1. Ineffective marketing - or none at all: In most cases, word of mouth alone will not carry your business through this tough economy. You have to market your business and set aside a percentage of your profits to do so. There is no magic bullet; some marketing venues work better than others (though I am personally biased towards Facebook Ads and Google AdWords), but you have to make sure you market your business in order to be successful.
Solution: After consulting with experts, develop a marketing plan that best suits your businesses needs. If you don't think you have the expertise to do so on your own, consult with a marketing professional.
2. Poor record keeping: This can come back to bite you - particularly if you have any legal or financial trouble. You have to keep good financial records, not only to ensure that you are complying with the law, but to make sure that your business is making a profit!
Solution: Track everything and invest in small business accounting software. If you don't have the time or are scared of making a mistake, hire an accountant.
3. Letting the marketplace pass you by: Remember when beepers were all the rage? Or how about renting movies? Or when everything was .com? The point is this: the marketplace changes. If you don't change with it, your business may fail. Also, and this is painful to say, sometimes the market simply no longer needs your product, be it because of new technology or a changing economy.
Solution: Make sure you have access to publications and data that can tell you if your market is on the upward or downward swing and adjust accordingly. Also, try to keep objective about your markets success - if it is possible.
4. Expecting immediate results and success: This is just plain silly. Any successful small business operator will tell you that there is no such thing as instantaneous business success. Small business owners have to be in it for the long haul and set their goals accordingly.
Solution: Make your goals realistic. Do not have yourself as in the black in six months; it most likely won't happen. This is why people who like instant gratification have such difficulty in business.
5. Relying too much on one adviser: Most of us has that one special person who helped make them who they are today: a boss, friend, coach, family member, etc. This is, of course, necessary in order to succeed. That being said, you cannot rely too much on one person; their advice may be biased or incorrect. More to the point, its always good to have a variety of outside perspectives to help make sure you are hearing the most information possible.
Solution: Assemble a "kitchen cabinet" of friends, family and paid advisors to give you the best information. Always try to hear multiple points of view on business issues so you can make sure you are hearing all sides of a possible decision.
Any other tips? Let us know in the comments!
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