small business

Mistakes That May Prove Costly for a New Small Businesses

Starting a business endeavor is a huge commitment. Although, once you’re in the thick of things, that can feel like an understatement. As a fledgling business owner you may experience tremendous pressure and find yourself working day and night. But it doesn’t have to feel like an uphill battle all the time if you avoid the common perils of starting a business.

Failing to create effective goals

It’s easy to come up with a list of general goals you want to achieve, but this approach will lead to unclear expectations. You should create effective goals that are SMART:

  • (S)pecific – Identify what products or services you will be offering.
  • (M)easurable – Provide important metrics such as the number of products you plan to create, the number of customers you expect to have.
  • (A)ttainable – Consider potential competitors and the viability of your business idea. For instance, is it realistic for you to compete with Starbucks or Amazon?
  • (R)elevant – If your intention is to set up an online business that sells smartphone gadgets, it does not make sense to find a food distributing partner.
  • Time-based – How long will it take you to achieve a goal?

Underestimating or overestimating your ideas

When this happens, it’s often the case that people neglect to do proper business planning and thorough market research.

Without a solid understanding of market needs and business realities, you will find yourself either undervaluing or overvaluing your offerings — leading to non-maximized revenue or less-than-satisfied customers.

Although such a scenario may not immediately knock you out of business, the consequences may not be felt until months or years have passed. And when a considerable amount of time has gone by, you’ve already invested large amounts of time and money in a ship that is sinking.

Not exploring financing options

A Small Business Administration or SBA loan is a good way to initially fund your business idea. There are other options but SBAs can come in different packages that can prove particularly suited to your needs. Each financing option will have different requirements and the key is to find out which one aligns with your business goals.

Shouldering all responsibilities

young entrepreneur

While it’s true that small business owners must work hard to make the venture succeed, overly relying on your individual capabilities is not a long-term strategy. You need a team and capable people around you and this becomes even more crucial as you scale.

Accept the fact that you will not have all the answers and the expertise to address problems as they surface. For that, you need a diverse team with varying skill sets and experiences that contribute to your goals.

Avoiding feedback

Your ideas may have several flawed assumptions or lack enough concrete data. When this happens, be open to your team’s valid criticisms or others’ advice. It’s in this process where you can further refine your products and services or further sharpen your SMART goals.

When you are able to tap into others’ expertise and honest opinion, you can shed light on potential issues that may affect your business later on.

Your idea can help drive overall growth

According to SBA, small businesses employ a considerable portion of the US working population.

When you start a business, you won’t just benefit yourself, you’ll also impact the individual lives of workers and the overall health of the economy. But before you achieve that, the business you started needs to survive.

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