Biggest Mistakes Made By Small Business Owners

Launching a small business is no easy task.  There are about a million things that can go right, and just as many that can go wrong.  Having a plan for your success is key to reaching your goals. After all, the saying “He who fails to plan, plans to fail” has been proven true many times.

Making these mistakes can interrupt your cash flow, productivity, and ultimately, your ability to meet the needs of your clients and consumers. Whatever the reason you decided to launch your business, be it money, the greater good or to fulfill a lifelong dream, you want to be sure to avoid the actions you’ll find in this article.

Business Mistake #1: Launching Without A Business Plan

Depending on your business, you may think having a business plan is a no-brainer, but for many owners this is a crucial step that they have failed to take.  Many times professionals like lawyers, doctors, and those in creative spaces find themselves opening their doors without a real plan in place. Thinking that you can simply launch your firm, practice, or agency and clients will flock to you, is a huge mistake.

Having a business plan is an incredibly important first step. A business plan helps with everything from developing a sales funnel, staffing, marketing strategy and predicting profitability.  

Business Mistake #2: Failing to Have A Marketing Plan

In this day and age, it may come as a surprise, but many owners fail to see the value in a functional website.  Maybe you launched your business at a time when websites weren’t necessary for your industry, but in today’s market, a website is the very baseline of the marketing channels you need in place for your business.  Having a formal marketing plan in place will ensure that when word of mouth dries up, you will still have clients coming through the door and your inbox. Tip:  If your marketing plan doesn’t include digital channels, it’s incomplete!

Business Mistake #3: Not Properly Price Goods or Services

Do you know the lifetime value of a customer? When pricing your services or products have you included the cost of overhead (even if it is just your time)?  Many owners will set prices based on the market. However, if you haven’t taken into account everything that goes into setting a price point, you may be underselling to your customers.  Selling too low (and in some cases too high) can choke your business’s revenue. If you are priced too low, you will find yourself overworked and your inventory suffering. Selling too high could cause you to lose out on sales to your competitors, or could harm the prospect of having repeat customers.

Business Mistake #4: Not Setting A Business Budget

Some business owners immediately invest every penny made back into their business, neglecting to pay themselves in the process.  While there’s conflicting viewpoints on the importance of paying oneself as an owner, one thing is for certain–you should have a business budget and separate accounts for yourself and  your business. Failing to properly divide your money into different accounts will cause problems for you when it comes to tracking expenses, revenue and filing your taxes.

Setting a budget, or a spending plan, for your small business is crucial when running a successful company.  Many entrepreneurs run out of cash in the startup phase because they did not plan for the proper use of their money.

Whether your business is established or in the startup phase, any of the mistakes mentioned above can slow your momentum and stagnate your road to success.  Even well established businesses need to revisit their business growth and marketing plans to make sure their goals and KPIs are still relevant.

If you have questions about how to manage your business’s growth strategy, or you think it’s time to for a professional accountant to look at your books, give us a call!

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Written by Desnoyers CPA

Desnoyers CPA

Known for her friendly, outgoing nature and her rare talent for financial foresight, Lydia Desnoyers has been serving individuals and small businesses in Florida since 2010. After earning her Master’s Degree in Accounting from Nova Southeastern University and her Bachelor’s Degree in Accounting from Florida State University, she became a Certified Public Accountant and a Certified Fraud Examiner.

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