And what to do to avoid making these same mistakes yourself.
As a business owner, I know firsthand how challenging it can be to run a successful business. There are so many moving parts to manage, and often you end up doing everything. When you are spread too thin, it’s easy to make mistakes along the way.
We all make mistakes, it’s ok – just as long as you learn from them.
After talking to many different business owners, and conducting my own research, I’ve discovered that there are several common mistakes most of us make.
In this article, I’ll discuss these mistakes and provide some tips on how to avoid them. Read on.
Business Mistake #1: Failing to Plan
One of the most common mistakes that business owners make is failing to plan.
According to a study by the Small Business Administration, only about 30% of small businesses have a written business plan.
Without a plan, it’s difficult to set goals, measure progress, and make informed decisions about the future of your business.
To avoid this mistake, it’s important to take the time to create a comprehensive business plan. Your plan should include information about your business goals, target market, competition, financial projections, and marketing strategies.
With a solid plan in place, you’ll have a roadmap for success and a better understanding of what it will take to achieve your business goals.
Business Mistake #2: Not Managing Cash Flow
Cash flow is the lifeblood of any business, and it’s critical to manage it effectively.
Unfortunately, many business owners fail to keep track of their cash flow and end up in financial trouble as a result.
In fact, a study by U.S. Bank and cited on the SCORE/Counselors to America’s Small Business, found that 82% of small businesses fail due to cash flow problems.
To avoid this mistake, it’s important to keep a close eye on your cash flow. This means regularly tracking your income and expenses, creating a budget, and forecasting your cash flow for the coming months.
Consider enrolling in a basic business administration or a marketing course to give yourself the knowledge and business acumen to ensure success.
Business Mistake #3: Running Out of Money
According to CB Insights 2021, the primary reason that new businesses fail is because of a lack of cash. In fact, 38% of small businesses fail because they either run out of cash or are unable to drum up more financial support.
This is especially true in the startup space when businesses are in the early stages of development and may not have a working product or service yet.
Unlike established businesses, startups are typically characterised by a high degree of uncertainty and risk. They may not yet have a proven business model, revenue streams, or an established customer base. Instead, they rely on a combination of innovation, creativity, and determination to succeed.
Running out of money here is game over.
Business Mistake #4: Trying to Do Everything Yourself
As a business owner, it’s natural to want to do everything yourself. However, this can be a recipe for disaster.
According to a study by the National Federation of Independent Business, 39% of small business owners say that they work more than 60 hours per week.
To avoid this mistake, it’s important to delegate tasks and build a strong team. This means hiring employees who are skilled and trustworthy, and empowering them to take on responsibilities and make decisions. By building a strong team, you’ll be able to focus on the most important aspects of your business and achieve greater success in the long run.
Business Mistake #5: Neglecting Marketing
Marketing is critical to the success of any business, but many business owners neglect this aspect of their business.
In fact, a survey by Infusionsoft found that 47% of small businesses do not have a marketing plan.
To avoid this mistake, it’s important to invest in marketing and develop a comprehensive marketing plan.
This means identifying your target audience, developing a messaging strategy, and using a variety of marketing channels to reach your audience. By focusing on marketing, you’ll be able to attract new customers, retain existing customers, and grow your business over time.
Business Mistake #6: Not Meeting Your Legal Obligations
The most common legal problem that small businesses encounter is related to employment law. Issues include hiring, firing, discrimination, harassment, wage and hour requirements, and workplace safety.
Failure to comply with these laws can result in costly legal disputes, fines, and penalties, which can have a significant impact on the financial health of the business.
In fact employers not paying their employees correct super may now face court, as the ATO is urged to come down harder.
A staggering $5 billion in unpaid superannuation was lost in the financial year of 2018-2019, according to an analysis from Industry Super, which suggests a quarter of workers were affected to the tune of $1,700 on average a year.
To avoid this mistake, it’s wise to engage a workplace lawyer who can put in place the right Employment Agreements.
They help with proper awards, categorisation of employees, employees v contractors, proper classification of casual employment, part-time employment or full-time employment and what each of those categorisations means for leave entitlements, leave loading, accruing of annual leave.
Key Takeaway Message
Running a successful business is not easy, and it’s natural to make mistakes along the way.
However, by avoiding these common mistakes, you’ll be better positioned to achieve long-term success.
Remember to take the time to plan, manage your cash flow, build a strong team, and invest in marketing. With these strategies in place, you’ll be able to build a thriving business and achieve your goals.
Marshall Thurlow is Director and Founder of Orion Marketing Pty Ltd. He is a digital marketer with expertise in SEO, website design, content marketing and project management. With over 15 years of experience spanning government, not-for-profit and the private sector, he is well equipped to lead teams to success. He is a big proponent of environmental sustainability, critical thinking and progressive issues.