4 Common Mistakes New Business Owners Make
When you’re starting a small business, it’s inevitable that you’ll make a mistake now and again. In fact, 60% of small businesses cease operating within three years. But knowing is half the battle. Here are some of the most common mistakes new small business owners make and steps you can take to avoid them.
You don’t fully understand the industry
In an age where every other person on Instagram sees herself as the next Annie Leibovitz, taking some creative photographs doesn’t mean you’re ready to go pro. The same can be said of any new entrepreneur starting a small business in a new industry before gaining an understanding of the landscape and respect for the work involved. Before you jump into a new industry head first, make sure to speak with experts and trusted advisers. Connecting with other, noncompetitive business owners in your local area can also provide you with valuable industry insights.
You don’t trust your employees
If you fear that your employees won’t do their jobs right, you may be more likely to micromanage them. Staff who feel as though they’re being micromanaged can often feel alienated, and they’re likely to quit and leave you running your business alone. Avoid micromanagement by being deliberate and thoughtful about how you hire your team members, consider your interview process and questions and give new employees autonomy to learn and grow in their roles. Giving qualified, trusted employees more responsibility will show them you’re confident in their skills, and that could inspire them to become better at their jobs.
People aren’t buying what you’re selling
This is possibly the most obvious mistake you can make. If customers aren’t interested in your product or service, a lack of market need may be the problem. You may have identified a need or desire of your own and shaped a business around it, but that doesn’t mean that other people share your need. Alternatively, it may be an issue with pricing or market saturation. Look at the sales data to get a top-down assessment of your business performance, and don’t be afraid to take a step back from your commitment to an idea and let it go if it’s looking like your chances for success are slim.
You expanded too quickly
Growth can be exciting. An uptick in sales and a busy queue running out the door can be great indicators that you’re starting to gain attention and traction. But growing too quickly isn’t always smart, particularly if you need to raise funds or hire new employees fast. Resist the urge to spend and invest without considering your options and ensuring that your short-term success isn’t a result of an abnormal burst of activity. Be patient, even if you feel as though competitors are zooming past you. In six to twelve months, they could be out of business whereas you’ll be in a more confident, stable position because you made decisions that helped build a foundation for structured growth.