Being a business owner is a dream come true for most people, but sadly half of new businesses don’t make it past the first five years.
Many of those failures might be caused by the economy or other factors, but some just boil down to mistakes made by business owners.
You might be making those same mistakes in your business now.
Here are seven mistakes you might be making and not even know it.
Working too hard
Like any small business owner, you put your heart and soul into your business. You find yourself working all the time, trying to crunch the numbers and do the marketing and everything else in between.
While hard work is great, you are burning yourself out which might well be the reason you are not doing so well. You might also be hurting your social and family life which, if nurtured well, can also contribute to the success of your business.
It’s important to maintain balance in everything and business is no exception.
Dreaming too much
Dreams are the fuel for any venture. When you chase your dreams, you will achieve great things, but keeping your head in the clouds is a recipe for disaster.
When you focus so much on the dream that you stop looking at reality and planning feasibly, you will find yourself on the wrong side of the business plan.
While the dream may guide the plan, you must come up with a business plan with projections, specific goals, and measurable plans.
Not being realistic about your financial situation
Money issues affect many small businesses. Particularly in the early days of a new start-up venture, it can be a challenge to keep your head above water.
And with employees comes a lot of Federal law red tape and headaches.
Make sure you are withholding employment taxes appropriately and adhering to all the 2021 Federal holidays so you aren’t making employees work when they are supposed to be off.
After all, it can be difficult to know how much money you’ll need to invest, how effectively you’ll be able to find customers, and at what point in time you might start to turn a profit. Many businesses also face issues with debtors not paying bills on time.
However, with a bit of forward planning, there are many strategies you can use to budget for your money commitments, and how to manage cashflow as you scale up your business.
From time to time, many small businesses struggle with money challenges. However, many issues can be solved with the right strategy and support.
Doing too much too soon
When you start your business you have lots of ideas for new products and there’s usually so much going on in your head. The reason it might not be working out as you planned, is that you are trying to do all of those things at once.
While multitasking might work for some things, it’s not a very good idea in business. It works better to specialize and grow one line before you move on to the next.
There is nothing wrong with gunning for big things but trying to grow too soon will have the opposite effect. Think of it this way, it makes more sense for a baby to crawl first before they can run so that when they do start running they have a strong enough backbone.
Allow your business to grow at a good pace, over expanding will put too much pressure on your resources, which might end up bankrupting your business.
Many business people are born from the hustle, but when you stay a hustler in business it doesn’t usually work so well.
A hustler mentality focuses on doing anything that will bring in the dollar. When your business is modeled around that, you become a jack of all trades and master of none.
While a certain level of diversification will help, too much of it will drown you. Customers want to buy from specialists, they trust in a reputation built from years of experience.
When you run from one business line to the next, you never get the chance to differentiate your business. The reason why may not be expanding as you would like is probably that you are hustling too much.
Motivation is a great tool to keep you going, but too much of it will make you believe you can fly.
When you spend too much time listening to motivation you may find yourself divorced from reality. You end up overestimating your abilities, your future cash flows, your market.
When reality strikes, it will probably be too late. You have over-borrowed, invested in machinery or new products with no feasible market.
To go for gold, you must stay motivated but in the same breath, stay grounded in reality.
Don’t let motivation get to your head, a little pinch of negativity does wonders sometimes.
Being a business owner means that you are the leader of your team. When it comes to people management, honesty might not be the best policy.
A little tact and diplomacy help to manage and inspire your team better. One of the reasons you might not be getting the best out of your people is that your leadership style lacks finesse.
A good blend of honesty sprinkled with a white lie, and some tact here and there, will help you to retain the best team.
Learning from your mistakes and working on them, may well be the saving grace your business needs to survive and thrive.