7 big mistakes small businesses can't afford to make
Photo: David McBee/PEXELS
Running a small business often means wearing many hats. From accounting to marketing and everything in between, it can be difficult to know all the ins and outs and to always make the right decision. Here are seven mistakes to avoid in order to turn your new venture into a big success.
No Business Structure
When you start as a solopreneur, you may be tempted to forgo all the legalese and just work on launching your product on the market. But not choosing the right business structure and not registering as the right business entity can end up hurting you in the long run.
For example, When it comes to incorporating a business, there are two main options: an S corporation (S corp) or a C corporation (C corp). You need to understand the S Corp vs C Corp pros and cons, so it's important to do your research before making a decision.
Photo: Andrea Piacquadio/PEXELS
One key difference between the two is that an S corp has pass-through taxation, meaning that profits and losses are passed directly to the shareholders, who then report them on their personal tax returns. A C corp, on the other hand, is taxed separately from its owners. Another notable difference is that an S corp is limited to 100 shareholders, while a C corp can have an unlimited number of shareholders. This can be important if you're planning on expanding your business in the future. When it comes to raising capital, a C corp has an advantage because it can sell shares to the public. However, this also means that there is more paperwork.
Ultimately, there is no right or wrong answer when it comes to choosing between an S corp and a C corp. It depends on your specific business needs and goals.
No Business Budget
For small businesses, keeping track of where the money is coming and going is critical. It will help you separate your personal and company finances, see how much your company is making, and establish what your fixed and variable costs are. Without a budget, you can’t set spending goals or run financial projections to attract potential investors or partners, which will hinder business growth.
No Marketing Plan
So you have a great product, but what good is it if no one hears about it? Without a strong advertising and marketing plan in place, you won’t be able to reach out to your target audience and ultimately generate sales. Failing to do some market research, analyzing what your competition is doing, and forecasting industry trends will prevent you from creating effective ad campaigns that will resonate with potential customers.
No Social Media Presence
It’s not just the kids doing it anymore; in today’s digital world, every business is online, posting content and engaging their followers on various platforms. This is where you showcase your brand and create sales funnels. You can also use social media to join groups and share your expertise, putting yourself out there for all the world to see. Keeping your content useful, relevant, and timely will also help you gain more customers.
No SMART Goals
Setting specific, measurable, attainable, relevant, and time-bound goals will help you steer your business in the right direction. Without SMART goals, you won’t be able to clearly see the end result, and you’ll be left wondering if your company is performing the way it should. Short-term goals are great to help you stay on track and motivated so that you can reach your long-term goals and turn your budding company into a big success.
No Legal Guidance
You may be a do-it-yourselfer in most areas of your life, but when it comes to your business, make sure you consult with experts and professionals to avoid costly fines and penalties. Not filing the proper paperwork with the state, or failing to register your business and paying the fees and taxes required to be in compliance, could lead to huge penalties and even put your company under. Consulting a business attorney may cost you upfront, but their expertise will definitely spare you troubles later on.
No Time for Fun
As excited as you may be to launch your own venture, make sure to carve out time for self-care once in a while. Too many entrepreneurs end up suffering from burnout because they don’t think they can afford a day off. But in order to refuel and spark your creative juices, you need to step out of the office and enjoy some downtime once in a while.
Owning your own business can bring you great freedom, but make sure you avoid pitfalls and take the necessary steps to keep it successful. Don’t hesitate to get expert advice, and hire professionals to fill in potential gaps. Your company will keep thriving, and you’ll enjoy running it.
Courtney Rosenfeld started Gig Spark to be a resource and the first step for people who are looking to join the gig economy, either to supplement their income or as a way to fulfill their dreams of becoming an entrepreneur.
