5 Mistakes Small Business Owners Should Always Avoid

major mistakes small business owners make entrepreneur errors avoid

Starting a new business isn’t easy. There is a lot of work to do and numerous daunting questions to answer before you can actually establish one. 

One wrong decision can hurt your business and prevent you from achieving your goals, especially in the very beginning. 

Therefore, I’ve put together this list of the most common mistakes that first-time business owners make. It also includes the ways in which you can avoid these mistakes to incorporate, run, and manage your small business efficiently. 

Let’s take a look at 5 mistakes to avoid as a small business owner. 

Table Of Contents 

1. Failing to Plan 
2. Choosing the Wrong Business Entity 
3. Not Building a Business Website 
4. Overpromising and Underdelivering 
5. Ignoring Social 

Media Ready to Establish and Grow Your Small Business? 

1. Failing To Plan 

First-time business owners often start their companies out of passion without any substantial planning, which can result in failure. 

As they say, “If you fail to plan, you’re planning to fail.” 

This saying couldn’t be more true when it comes to incorporating and running your own business. If you want to succeed, you should make a well-documented business plan that defines everything it will take to build a profitable business. 

Your business plan should answer: 

• What type of business are you forming? 
• How will you raise funds for your business? 
• Who is your target audience (your ideal buyers)? 
• Which products or services are you offering them? 
• How will your products or services help solve your customers’ problems? 
• What are other companies in your target market (your competitors) offering? 
• Why should consumers buy your products or service packages? 
• How will you market your products or services? 
• What are your short-term and long-term business goals? 

Answering these questions will help you lay a solid foundation for your business. 

2. Choosing the Wrong Business Entity 

Another major mistake that business owners make is choosing the wrong business entity. 

If you want to work for a noble cause and raise funds as donations, it is best to incorporate a non-profit organization. Similarly, if you want your business to not exist separately and report your business income on your personal taxation, you should form a Sole Proprietorship. 

Choosing the wrong business entity can cause issues with: 

• Taxation Personal liability 
• Membership limitations 
• Legal expenses 

To avoid this mistake, you need to pick the type of legal business entity that best suits your taxation, liability, and operation needs. 

What kind of business should it be? Do you want to form a Limited Liability Company (LLC) or a Corporation? Is a non-profit organization the right setup for your business? 

Are you not sure about the entity type you should choose? You can take the entity type survey by GovDocFiling to make an informed decision. And the best part—their business formation packages will make it easier and quicker for you to finish all of the important (but less fun) paperwork. 

3. Not Building A Business Website 

Many small business owners don’t consider taking their businesses online or leave this step for a later stage. But it actually limits their exposure. 

Gone are the times when setting up a brick-and-mortar store was enough. These days, consumers often search for the products and services they need online. 

That’s why building a business website is as important as registering your company with the state. And the good news is — It’s easy to set up your own business website with website builders platforms without any coding knowledge. 

When building your business website, you should make sure that it has: 

• A mobile responsive design 
• All the information that your buyers might need 
• Easy navigation 
• User-friendly interface 
• Simple and clean design 
• Compelling calls-to-action (CTAs) 

You should also start a blog to improve your search visibility, drive more targeted traffic, and increase the chances of conversions. 

4. Overpromising And Underdelivering 

First-time entrepreneurs and small business owners are driven by the pursuit of generating revenue and making a profit. They tend to accept orders, projects, and deadlines that aren’t really possible to achieve. 

Overpromising is one of the greatest mistakes that you can make as a business owner. It can do more harm to your business than anything else. 

You should always follow a realistic approach when taking orders, instead of taking on too much and then failing to meet targets. 

If you start getting good business, you should scale up your workforce by hiring the right skilled professionals and delegating work to them. Remember, it’s not wise to do everything yourself and get burned out or increase the workload of your existing staff. 

Strike a balance between workload and workforce to run your business successfully. 

5. Ignoring Social Media 

Many business owners make the mistake of ignoring social media. It is as bad as establishing a business and telling no one. 

The number of social media users worldwide is expected to reach 4.41 billion in 2025. Do you want to miss the chance to reach, engage, and convert such a massive audience? 

Of course, not. 

You should focus on building a robust social media presence of your business by: 

• Choosing the platforms your potential buyers are active on 
• Optimizing your profiles with your business’ name, address, contact, logo, etc. 
• Posting valuable content that is relevant to your niche 
• Engaging with users via comments, DMs, and interactive content 
• Showcasing your products and service packages 
• Offering discounts 
• Addressing customer requests and complaints 

Doing all of this manually can be time consuming. You can use automated tools to manage your social media accounts, schedule posts, analyze performance, and optimize it for greater engagement. 

Ready To Establish And Grow Your Small Business? 

A profitable business is not built in a day. It takes a lot of time, effort, and resources to build a business from scratch, do the paperwork, establish operations, get customers, deliver, and grow. 

You should avoid these mistakes that can set back your business’ growth. At the same time, do not be afraid of failure (some occasional mistakes are almost inevitable). In fact, you should learn from your mistakes, get feedback, and improve your products and services. 

Do you have questions about forming a business in the United States? Tweet us @MikeSchiemer #BootstrapBusiness 

brett shapiro govdocfiling

Brett Shapiro is a co-owner of GovDocFiling. He had an entrepreneurial spirit since he was young. He started GovDocFiling, a simple resource center that takes care of the mundane, yet critical, formation documentation for any new business entity.

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