According to the Small Business Administration (SBA), there are 30.2 million small businesses in the U.S. Those small businesses employ 58.9 million employees.
In other words, 99% of all businesses are small and they employ nearly 50% of U.S. employees.
Unfortunately, the failure rate is high for small businesses. Only one in three makes it to the 10-year mark.
One way to ensure your business has staying power is to avoid common business mistakes. But you can't avoid them if you don't know what they are or what to do about them.
We want to help you succeed. Keep reading to learn the top eight most small business mistakes to avoid.
1. Not Knowing Who Your Target Market Is
If you think everyone is your target market, you're going to go out of business very quickly. Even large corporations like Amazon and Coca-Cola have specific target markets.
And those companies spend time getting to know everything about their target market so they can meet their needs. Pretend you're a customer and consider what you'd want and need from a company like yours.
Understand What Your Target Market Shares in Common
Write down common attributes that your customer's share such as:
- Income level
- Education level
- Hobbies and interests
- Geographic location
2. Undervaluing Your Products or Services
Most people are suspicious if you undercharge for a service or product. And many business owners do just that because they either lack confidence in their ability and/or have a fear of failure.
When you set your prices too low, you undermind the unique value you bring to the table. And it can also lead to frustration and growing resentment.
Instead, check out what your competitors are charging and find out what your customers are willing to pay. Often, there's a perception that a higher price must mean better quality.
3. Not Setting Goals or Creating a Plan
It's hard to know if you've succeeded when you don't have a goal. Take some time to write down what you want to achieve each year or even each quarter.
Then create a step-by-step plan to help you figure out how you're going to reach those goals. Figure out what tools you'll need to get you to your goal and how much money it will cost.
You should create both a business plan and a marketing plan every year. It will help you set your yearly budget and help prevent you from making costly mistakes.
4. Not Investing in Automation
There are so many ways that technology helps a business. Especially when you can automate systems.
When you invest in automation you can increase productivity, decrease making mistakes, and invest your employee's time to focus on more meaningful tasks. Automation helps you create effective systems that help you get done more in less time and can often save you money.
It may take some time to learn how to use new technology, but being completely unwilling to adapt some of it can hurt your business in both the short- and long-term.
5. Failing to Protect Your Data
Over 40% of cybercriminals target small businesses. And 60% of small businesses targeted by a cyber attack go out of business within six months. Those are numbers your SMB can't ignore.
The others pay thousands or even hundreds of thousands of dollars to clean up the mess the cybercriminal left. It's not worth it and there are easy and relatively inexpensive ways to keep your company and your data safe.
One way to do that is to always back up your data. Whether it's a cyberattack or a natural disaster, having a disaster recovery plan in effect can save your business.
6. Not Setting a Budget
Some businesses make the mistake of spending too much. You don't have to invest in the best of everything when there are usually less expensive, but equally helpful options available.
Other businesses don't spend enough money which limits their potential for success.
Creating and sticking to a budget can help you plan ahead, reach your goals, and always ensure you have enough money to expand when you need to.
How to Set a Budget
Here's how to set a basic budget:
- Add up your income sources
- Figure out your fixed costs
- Estimate variable expenses
- Predict one-time expenditures
- Add up everything
7. Failing to Outsource and Delegate
Most business owners struggle with disorganization and productivity issues. They don't know how to spend their time on the right projects and often fail to delegate.
When a business owner tries to do everything on their own, they inevitably fail for the following reasons:
- They're exhausted
- They're focusing on tasks they are not experts on
- They're performing tasks someone else can do more cheaply
Let the Right Professionals Help
Outsource tasks to the right professionals such as:
- Accounting
- Legal
- Marketing
8. Not Knowing How to Market Your Company
Most business owners are woefully ignorant about how to market their own company. And while you can hire someone to do it for you, if you know nothing about marketing, you may end up going over budget or worse, hiring the wrong company.
You don't need to become an expert, nor should you try. But having a basic idea of what your marketing objectives are will help you make smarter decisions.
Avoid These Business Mistakes!
We understand that it's not always easy to figure out how to market your company. And it's why a lot of business owners make costly business mistakes.
We can help your SME with that. Keep coming back to our site to learn about the latest in marketing.
