8 Biggest Mistakes Business Owners Make

August 18, 2021/ Posted in Credit Card Processing

Running a successful startup appears as an exciting idea, at least until all the mistakes business owners make come to mind. Of course, you don’t want to be the one responsible for turning a potential for success into a failure just because you didn’t think everything through carefully. But there’s no reason to worry because we’re here to cover some of the most common pitfalls young entrepreneurs face when building a company from scratch.

#1 Young Entrepreneurs Usually Don’t Come Up With a Thorough Business Plan

If there’s one wrong turn you can take and fail right at the beginning, it’s by thinking that an idea can survive without a proper strategy. That being said, it’s vital to understand that not devoting your time to creating a business plan and product development is unarguably one of the biggest mistakes small business owners make. Having a good plan means predicting all potential future problems and possible solutions, much in advance. Good infrastructure will surely help you manage if and when issues arise.

Having Unmeasurable Goals Could Cost You Business

Sure, setting goals might be a top priority when you’re only starting a company since they help you stay focused and keep you moving forward. But how can you tell whether or not you’ve gotten close to them or even achieved some? For this reason, setting metric-based goals that are easy to measure will enable you to evaluate how far you’ve come.

However, to achieve your primary goals – such as distributing your idea to customers, making it profitable, and remaining on the market – there are many sub-goals you can’t do without. At least if you want to prevent your startup from becoming stagnant or falling through. Knowing where you are headed and how to get there will give you a much-needed sense of control in times when you’re feeling overwhelmed by responsibilities.

Preparation and planning are the key elements for success

#2 Lack of Proper Market Research Is One of the Common Mistakes Business Owners Make

If you’re wondering what the most common mistakes new business owners make are, not having the correct information about the market might be just one of them. It’s great if the ones that care about you tell you how brilliant your idea is, but quite often, that’s not enough. It rarely is. Understanding how competitive and oversaturated the market is might be the first step to get strong enough for it.

Also, identifying a target market and knowing who your ideal customers are is a vital part of the research. If you don’t have answers to the most basic questions, how could you ever know if the product you’re trying to offer is needed at all? Or wanted? Or affordable? It’s time to start approaching the idea the right way, as all real entrepreneurs do – research-minded and with utmost curiosity.

Underestimating the Competition

There’s one rule to follow if you want to succeed – don’t ever underestimate the competition. Even if you are pioneering a new product category, don’t fall into the trap of thinking there’s no competition around you. It will come in many forms and shapes, but whatever you do – do not believe you’re better than all of them because the market is packed with entrepreneurs willing to work like Trojans to reach their goals.

If you’re genuinely trying to be good at something and get to your customers, find someone who’s better and more successful than you, and don’t view them as a threat. It’s the competition that pushes you to think more, work harder, and be innovative. You have to admit that, after all, having strong competition is not so bad, isn’t it?

#3 Creating a Poor Marketing Strategy

No matter how good the product or service you’re offering is, it takes more than having a website for a potential client to notice you. It’s a well-known fact that living in the digital era means consuming too much information on a daily basis because everything’s online and accessible. It also means nothing will stand out unless you find a way to channel it through.

Neglecting the importance of a good marketing strategy could diminish the possibility of getting close to your target audience. LinkedIn followers maybe won’t subscribe to your YouTube channel or other social media. So choose the proper channels and think through the tactic because ineffective branding is as bad as (if not worse than) no branding at all.

Not Using Free Web Analytics

If you are on a mission to position yourself among successful and influential entrepreneurs, gathering all available information on improving your startup is quite an important step. That’s where Google Analytics comes in handy as a crucial marketing tool that helps you measure and track the success of your online presence. Ignoring available data is like refusing to understand what you’re doing right and what could be done even better in advertising. Whether it’s your website that doesn’t perform well, an ongoing social media campaign, user experience, or maybe something entirely different, you have to believe the metrics.

Having a poor online presence is never a good idea

#4 Investing in Wrong People Won’t Make It Any Easier

Sure, hiring the right people is vital to any company since the overall productivity and efficiency depend on them. Not to mention that no one ever got anywhere by doing it all themselves. Then again, when you have the wrong people on board, especially if you’re just starting, it means losing much-needed time and money. To prevent bad hires and find applicants that fit the working environment, be sure you take these steps:

  • Offer enough resources on the web – Keep in mind that, when job-hunting, the majority tends to do thorough research on the company, from going to their website to checking their social media. This is a perfect opportunity to filter out those that do not align with the company’s values and vision.
  • Provide clear job descriptions and requirements before posting them online – You can’t hope for a suitable match if your job postings are not well-crafted.
  • Don’t just wait for the ideal candidate – Researching your part is also necessary if you’d like to avoid one of the usual pitfalls. Figure out the places where individuals you’d like to work with are hanging out and find your ideal candidate.
  • Always go beyond CV screening – You will never get the whole picture with a resume alone because being a good match is much more than qualifications and education. Interviewing is the best way to get to know a candidate better and determine whether they are a good fit.
Having high-quality employees is vital to your startup

#5 Not Doing the Accounting

What are the mistakes in small businesses that could seriously affect the effort put into the whole idea? The answer is quite simple – bad bookkeeping and accounting practices.

Not evaluating the cash flow properly is a huge issue, but that’s not the only reason why these are so important. Understanding where the money is coming from and where it goes is vital for your financial health. It’s the only way to keep track of every financial aspect involved, whether it’s the employees we’re talking about, marketing, customer service, or some other element.

Even one piece of incorrect accounting information on your tax files can lead to sky-high fines and fees. What you need is an experienced accountant, so do not skimp on hiring one. Otherwise, you might get into trouble.

Keeping a Close Eye on Overspending and Underspending Your Money

If you don’t want your company to fail before it even starts, a bit of self-discipline is what you need when it comes to financial management. Whether we’re talking about overspending or underspending, both of these are common missteps that could lead to failure. Learning to stay afloat equals learning what it means to spend your money on things you need. No more, no less.

To avoid overspending, like investing in super-advanced equipment and software systems that you might not need, try to find just as functional but more economical solutions. On the other hand, as odd as it may sound, even underspending can cause a downfall because being too stingy will cost you some big bucks in the long run.

Bad bookkeeping practices are not just bad for the budget, but for your overall success

#6 Using Outdated Payment Methods

If you are a startup founder or small company owner, you’ll have to leave the comfort of using the cash register behind and modernize your pricing system. Nowadays, there is so much more than card readers. With many mobile POS platforms to choose from, you can track all customer data, use it for promotions and discounts if needed, etc.

To boost your biz with merchant services and stay competitive in the industry, using a point-of-sale system is a must. The only thing you have to do first is to apply for a merchant account, and if you’re still not sure what a merchant account is, it’s pretty simple. It is a type of entrepreneur bank account that allows you to accept all electronic payments. Also, this is a perfect moment to remind you how important it is to know where your money goes. With services from Circle Merchant, a credit card processing company, you’ll have low POS fees and transparent insight on all your transaction fees, so you will know at all times where your money goes.

Enabling merchant credit card processing will boost your company’s revenue

#7 Not Setting up Your eCommerce Business Correctly

In the last few decades, the online environment has become the most fertile ground for fresh ideas. And although selling things online is getting more and more popular, starting an eCommerce business is still a complex venture. Knowing how to set it up properly will determine how successfully you will operate. To make it easier for you, we rounded up some of the most crucial steps:

  • Choosing one of the proven businesses models,
  • Making sure your company is compliant with all laws,
  • Selecting a fitting platform (Woocomerce, Shopify, Big Commerce),
  • Creating a good plan and a budget (hosting, themes, transaction fees, etc.),
  • Thinking of different payment methods.
When you have a good plan, establishing an eCommerce shop is easy

#8  Not Paying Enough Attention to Tax Responsibilities

If people wondered more often what the common mistakes in business are, they would know how small businesses pay taxes before it becomes an issue. However, sometimes many new entrepreneurs are so caught up in daily management that this one slips their minds. Especially when it comes to rapid growth, it’s hard to stay up-to-date on tax responsibilities for many. This is where small business tax deductions come in handy, but even good stuff slips the mind easily when you’re all over the place.

Do not let tax responsibilities slip your mind

Apply These to Your Business if You Want to Watch It Grow

Of course, if you want to grow, be prepared to make some errors on your way because they are an inevitable part of the game. However, now that you know what the 8 mistakes of entrepreneurship are, take them as a lesson. Learning from other people’s errors is a real thing, so you do not have to wait to fail to tell yourself it’s finally time to start implementing these.