Running a small business can be extremely exciting, but the pitfalls you can come across and the mistakes you can make are not only daunting, but their implications can seriously hold you back. In this article, we’ll explore the common mistakes that small businesses make, and how you can mitigate them.
Common mistakes small businesses make
Lack of proper planning
Agreed, there is an element of ‘just take action’ when starting out as a small business, as overplanning can lead to a kind of paralysis. However, a complete lack of adequate business planning will soon run you aground if you’re not careful. Failing to properly think through business objectives, what skills you’ll need from the team you’re building, and the KPI’s you’ll use to measure success, can have you walking blind into a business black spot.
Poor financial management
Splashing the cash can get you into trouble in business just like it can in your personal life; overspending, poor budgeting, and cash flow problems could spell the end of your small business before you’ve had the chance to truly taste success.
Neglecting marketing and sales
When you’re small, every touch point with your customers counts; the marketing ‘rule of 7’ suggests that it takes 7 interactions with your brand before a purchase takes place, making your sales and marketing an absolutely crucial part of your operations. Failure to consistently utilise relevant digital marketing channels, such as email, social media, SEO, content marketing, and influencer engagement means you’re missing out on countless online customers, and neglecting business development lets those leads slip away to competitors.
Failing to understand customer needs
If you don’t ‘get’ your target audience, they can sniff it out a mile away, and they’ll know you’re not really going to solve their problems with your product or service. You may think you know what they want, but that’s not enough; you need the cold hard facts.
Strategies for avoiding common mistakes
Comprehensive business planning
First things first, draw up a solid business plan. These are detailed documents, which include not only a summary of your goals, products or services, and target audience, but also your business model, market analysis, the organisational structure, marketing and sales strategy, funding information, and financial projections.
Clear goals and objectives will not only give you and your team some direction, but also prompt you to measure your progress against transparent KPIs.
Effective financial management
Every expense needs to be accounted for, from your materials and stock, to your print management services. This will help you implement effective budgeting, healthy cash flow, and manage your expenses in a way you can easily see. Accounting software like Xero can really help in this area, particularly for small businesses who may not have grown to accommodate a finance department just yet.
Robust marketing strategies
Working out how you’re going to reach your target customers, and appeal to them, is a huge part of your business’ success. This means developing a consistent marketing plan, predominantly digital, to target the customers looking for what you do on platforms that they regularly use, such as social media and YouTube ads. Don’t forget to pay attention to SEO, so that you appear first on Google for people already in a position to engage with a business like yours.
Understanding and meeting customer needs
Conducting market research as well as taking on board feedback from your existing customers will help you provide better goods and services in the future. As we mentioned, a failure to understand your customers’ needs will see you falling flat, so engagement with the people you’re looking to appeal to will go a long way to meeting and exceeding their expectations.
Use review platforms such as Trustpilot, and even conduct some Instagram polls for accessible ways to gauge customer needs.
To conclude, planning and preparation is everything when it comes to avoiding mistakes and common pitfalls that you can make as a small business. As with anything worth doing though, an open mind, adaptation, and constant reflection are key to overcoming any challenges you face.
