The Top 4 Common Small Business Mistakes to Avoid in 2017
The Small Business: What it Means
Small businesses are the heartbeat of America. In a sense, small business is the atom of all gargantuan commercial matters.
Communities were built on them. Landmark construction was the result of the small business. Matured and healthy economies are born as small enterprising ideas.
But as a small business owner how do you expect to experience growth? Why would you anticipate prosperity if you are making these common small business mistakes?
If you are wondering, yes, these four are ranked in order of detriment. They are far too common, and personally it blows me away when I interview some entrepreneurs. Neglect any one or combination of these and you’ll be flirting with disaster.
4th Common Small Business Mistake to Avoid
Ignorance is Expensive!
Small business owners…stop it! Especially those that work from home. You must plug into your industry.
Know your market.
The failure to educate yourself (or potentially employees) is a very common small business mistake. Ironically it can be very easy to immerse yourself into knowledge.
You can find webinars from internet marketers. If you’re fortunate enough to live in a large city, be on the lookout for motivational conferences. If that’s not your style then network at conventions of your niche.
Search well enough and you will find the resources in your area. If all else fails then peruse Amazon for some great audiobooks. Invest in them, too!
Just know your industry.
Become wiser than your competition – and know your customer base. Industry ignorance would arguably be the least detrimental of these four small business mistakes.
3rd Common Small Business Mistake to Avoid
Account for It!
Why? Why are you in business in the first place? Hopefully it’s to make money and profit! How will you know your financial status if you’re not using proper accounting principles? As humorous as it may seem many would be entrepreneurs refuse to do as much as scan a receipt. You don’t need to be an accounting graduate, although a class or two will help.
The ancient Romans were obsessed with record keeping. Their military bases kept detailed accounts on everything from how much grain was in their stores to how many nails were in their workshops.
Basically, you ought to keep current (real time) record of money going in and money going out. Are you spending too much on inventory? How old is your inventory?
What about supplies and your operational costs? The purchase of even printing paper should be accounted for.
Avoid the small business mistake of losing track of your payables. Keep the creditors of your back and definitely the IRS.
You have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 instructions. For details, see the Self-Employed Individuals Tax Center.
Receipts, scanners, PDF documents, cloud drives, and spreadsheets will all be your allies in accounting.
Just please – stay in business and keep the Uncle Sam of your heels. Account for it!
2nd Common Small Business Mistake to Avoid
Let it Flow!
This common small business owner mistake can be tough to get your hands around. You must have that ability to generate cash flow.
This is your tangible spending power as a business entity. Cash flow can be created by a simple service that you provide.
A brick and mortar car wash may sell air refreshers to complement the more expensive car wash. A top dollar law firm may offer to fax documents or notarize for the public for a few bucks. Cash flow can also come from services in addition to unassuming products.
With internet marketing often times you will hear the term, funded proposal. Similar to a brick and mortar business these proposals can be virtual products or services. The funded proposal’s mission is to generate small (but steady) amounts of cash flow for the online business owner.
How "Big" is Your Small Business?
Oh! They're Consistent.
The common small business mistake of falling behind on payables can be avoided by good cash flow. While usually not originated by your big ticket products or services, cash flow is consistent.
Your company’s bills are consistent too!
So are paydays – a sure issue if you have employees. Never quit researching ways to introduce new flow into your business. Keep an eye on your original methods in case they need future tweaking.
The drum roll….this is insane.
The #1 Common Small Business Mistake to Avoid
A.B.M. (Always Be Marketing)
This is very insane. The number one common small business mistake being made is not advertising. Can you believe this? The fact that this made the list is disturbing.
There are actually entrepreneurs out there that don’t understand the importance of marketing and advertising (M & A).
Even worse, some fall into the trap of believing that their company can rely on just word-of-mouth advertising.
Everyone will not be talking about your business all of the time.
This small business mistake is one to avoid like the plague. Word of mouth is great; and still very effective. But there is a giant out there called The Internet – and this giant is still sleeping.
Both internet users and email accounts alike are growing at alarming rates. Why wouldn’t you advertise your business? If you’re a small business just a microcosm of the global population knows you. Besides, do you want to get buried by your competition? Advertise!
What Does a Marketing & Advertising (M & A) Budget Mean to You?
"This is the act or practice of calling public attention to one's product, service, or need."
Market, too! There is a Difference.
Don’t just promote your business everywhere. Study and educate (there’s that word again) yourself on your group or potential customer base. If you’re a maritime company spend careful time marketing to a community with no water in sight.
"Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."
source: American Marketing Association
The more targeted your marketing, the greater return on investment, the fatter the profit margin. Lose the poison about not having money for advertising. This is where establishing cash flow comes in. Make (and keep) a M & A budget!
This small business mistake, folks? Stop it! Use your vehicle to advertise your brand. Use your vehicle to advertise your brand.
No, that was not a typo. Does Monster, Nike, Acura, Under Armor, or Shell pay you to use your mode of transportation to brand them?
Your branded URL to your website could easily go there instead. Lastly, you need keep business cards. These things should be practically growing off of you everywhere you go.
You never know what type of conversation you’ll over hear while standing in line somewhere. Wouldn’t it be great to be able to just whip a card out?
Business Card Facts!
- Studies show that your sales will increase 2.5% for every 2,000 business cards you distribute.
- Meishi is a Japanese business card. It was the first business card ever produced, originating in the 15th century.
There you have it: The top four common small business mistakes to avoid. You may chuckle but these mishaps can and will affect your bottom line and growth.
Of course, there are many more factors attributed to your success. These are just unnecessarily common.
If you agree (or oppose) this list, please share your comments below. Even add what you think should be avoided by business owners. Bookmark this article if you must, and please rate it. Thank you.
About the Author
Kevin Timothy is an entrepreneur and home business owner that teaches others how to empower themselves. Some of his interests include investing, horticulture, the Florida Gators, and flying.
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