Thousands of people start small businesses every year. Of these thousands, 50 percent will be shutting their doors within five years. It’s an unfortunate fact that half of all small business owners never see success. If you’ve recently started your own company, it’s important to avoid the pitfalls that others have faced if you hope to see your business thrive. Here are the top five mistakes to avoid when starting your small business:
1.Finances
You may be surprised at how many businesses fail simply because their owners don’t understand how to keep the books. Accurate record-keeping is one of the most important skills that a small business owner needs to learn. If you have recently started your own company, hiring a professional accountant can help you clear the hurdle of bookkeeping and hit the ground running. A professional can make sure that your books are both accurate and legal, and can alert you to any problems or issues as soon as they arise.
2.Marketing
You must know how to market your business if you expect it to grow. Many business owners make the mistake of sitting back and waiting for customers to come their way. Remember that no one will know that you exist if you don’t get your name out there. Marketing is not a difficult thing to do but it does take time. When you first start your business, more than half of your time should be dedicated to marketing your goods or services.
3.Unwillingness to Change
If you are a stubborn person, you are virtually guaranteed to see your company fail within five years of opening its doors. Savvy business owners know that they have to roll with the punches and remain flexible. You may eventually need to hire employees, change your marketing tactics or even upgrade your services. If you expect your company to grow, you’ve got to be willing to grow with it.
4.Low Sales
If you have opened a store, whether it’s brick-and-mortar or virtual, low sales can be a business killer. If you aren’t selling as many items as you thought you would, ask yourself why. Your items may be outdated, they may be the same as another company’s or you may need to market yourself better. If your sales are incredibly low, finding the reason and making changes can mean the difference between success and failure for your small company.
5.Unexpected Growth
Unexpected growth is the flip side of low sales. Some small business owners see such a growth in sales or services rendered that they can’t keep up. If you are lucky enough to realize an unexpected boom in business, you must step-up to the challenge. Knowing how to meet the demand of your customers will mean that your business is still humming along six years from now. Whether you need to hire employees, enlist the help of friends and family or work more hours, rising to the challenge of unexpected growth will ensure that you stay in business.
Owning your own company can be both stressful and completely liberating. By avoiding the mistakes that other small business owners have made, you can ensure that you make it beyond your first five years. Follow the tips above and you’ll have the business that new start-ups are looking to for inspiration.
Jes Reid writes for McKinley Plowman & Associates. Click this link to read more about getting your finances in order.
