When you hear about opening a small business, it sounds really simple. You pick a niche, invest the money into ads and watch the profits soar. Well, if it were that easy, everyone would be a business owner these days. The truth is that starting a business can be pretty difficult, especially for those trying it for the first time. There are so many steps to get you from the starting point to the launch line. Some of the hardest but most rewarding work will happen within that grey area. In this article, we investigate some common business owner mistakes.
The success stories you see online are from people who put in the hard work and effort. Granted, some of them do tend to exaggerate a bit and say things like opening a business has never been easier. In hindsight, this is true as the internet has evolved to the point anyone can go onto a platform, like Shopify, and can have a startup ready in just a few clicks. Despite the ease of access, you still have to put in the time, effort, energy and funds to make it successful. However, you also need to be on the ball with pretty much everything as mistakes can be made. Here are a few mistakes every new small business owner needs to be aware of and how they can avoid them.
Going in Blind is One of the Most Common Business Owner Mistakes
The first mistake you can make with this is going into the process with little to no knowledge. Not knowing the basics of business is a recipe for disaster. Before you start, it’s important for you to get a feel of what to expect as a business owner. You can easily learn what you need for free as there are a ton of online guides and courses to explore. Alternatively, you can also consider going to college and obtaining your degree in business. You might be thinking there’s no point in doing this if you can learn what you need for free. College is an investment, but what you learn from it is far more valuable than what’s taught to you online. Your assignments will, more often than not, put you in scenarios where you must act like you’re a business owner.
You’ll learn how to compile data, learn the importance of interacting with your target audience and understand how to perform in-depth research. A BA in business can be pretty expensive as it can cost almost $140,000 in total. Fortunately, you’re not obligated into paying this out of pocket. There are plenty of ways for you to finance your college education, but a student loan is a great option. They’re easy to acquire and they’re the fastest method of financing. Going to a private lender is a great option as they usually come with reduced interest rates. They may also allow you to customize when and how much you pay each month as well as give you the option to refinance your loan into a new one.
Underestimating the Importance of Insurance
Perhaps the most detrimental mistake any owner can make is not protecting what they’ve worked so hard to build. You can never be too sure of what could potentially happen. Maybe a natural disaster occurred and caused immense structural damage. Alternatively, a customer could have had an unpleasant experience or sustained an injury on the premises, which might lead to a lawsuit. Here’s a brief list of the insurance policies you need to have:
- General liability
- Worker’s compensation
- Professional liability
- Data breach
- Commercial property
- Business income
- Commercial umbrella
Having these insurance policies in effect can keep you safe from any natural disasters and legal claims. Bear in mind that the most necessary policies are general liability, worker’s compensation, and commercial property insurance. Everything else is optional unless mandated by your state guidelines.
You’re Not Familiar with Your Audience
Business is more than simply coming up with new products and services to sell. It’s also about building a faithful community. This is accomplished by researching and interacting with your target audience. If you do not know this, that is one of the telltale signs you need help managing your business strategies. Since today’s society is mostly digital, the best way to connect with your audience is through social media. Social media is the biggest network for businesses to use as it helps them reach out to people locally and internationally. Not interacting with your audience is another mistake you must avoid. Business owners who refrain from engaging with their audience won’t be able to learn what they’re looking for. They also won’t know how their consumer’s experience was, so they can incorporate their feedback into future ventures.
Thinking There’s No Competition
One thing you’re going to learn really quick is that the business world is full of competition. No matter what your niche is, you’re always going to be competing with other companies. Underestimating or ignoring them entirely is one of the biggest mistakes anyone can make. Remember when we said you’ll be learning how to research and compile data in your BA program? Your competition is one of them. Researching how and what your competition is doing is how you’ll stay on par or even one step ahead of them.
Investing Too Much is Among Frequent Business Owner Mistakes
Investing money into your business, whether it’s for ads, your ventures and even your employees is always going to be a priority. However, it’s important for you not to be overzealous with your finances. Investing too much is a huge risk, especially for a small business. If you’re looking for a safer way to invest, we recommend trying out crowdfunding. Crowdfunding is not only a way for you to get your hands on the extra funds you need, but also a great way to show off what you’re currently working on. To hook the crowd and maximize your profits, make sure to be as transparent as possible as you showcase. It’s how you build trust and loyalty. You also want to make your presentation as enticing as possible, so you can hopefully reign in an angel investor.