So, you’re considering taking the plunge and starting your own business? Congratulations! Owning your own small business is an incredibly rewarding but also challenging feat. With all the responsibilities entrepreneurship has in store for you, it’s no wonder that many small businesses fail within the first year.
There is, however, an excellent way to keep your business afloat and possibly increase your brand’s chances of success. Avoid making these four common mistakes when starting your small business venture, and you can make entrepreneurship less stressful and more gratifying.
1. Overextending Yourself
When you’re first starting out, it’s easy to get caught up in the excitement and try to do too much too soon. You might be taking on too many tasks, even if that means skipping your meals, not taking any paycheck, or even working 24/7. This level of dedication and commitment is unsustainable in the long run and can quickly lead to burnout.
If you are in this situation, take a step back and assess your priorities. Determine what tasks are essential and delegate or eliminate the rest. You might also need to hire some help to focus on the most critical aspects of running your business.
Let’s say, for example, that you’re starting a home-based business as a web designer. Initially, you might be handling everything from design to customer service to invoicing. But as your clientele grows, it might be time to outsource some non-design work so you can focus on generating new leads and completing projects.
2. Skipping A Legal Checkup
Many first-time entrepreneurs make the mistake of assuming they don’t need to consult with a lawyer when starting their business. This could be because they’re unaware of the legalities involved in setting up and running a business, or they might think it’s too expensive. Unfortunately, many entrepreneurs wait until they get slapped with a lawsuit before they seek legal counsel.
Consulting with a lawyer from the get-go can save you a lot of money and headache in the long run. At the beginning stages of starting your business, they can help you with everything from picking the right business structure to drafting contracts and agreements. If you are buying a business, you want to have a lawyer review the purchase agreement.
Finding a reputable small business attorney should be non-negotiable when starting your business venture. Look for someone with experience advising small businesses and who offers various quality legal services that can help take your brand to the next level. You want a qualified attorney that knows everything there is to know about business law and is already established in their career to offer you the best guidance and protection possible.
3. Not Knowing Your Target Audience
Many small businesses are so busy crafting the best products and providing the best services that they fail to identify their target consumer. Know that just because many people from different walks of life can find a use for your offer, not everyone is a potential customer.
To determine your target audience, start by identifying the common characteristics of your ideal customer. For example, if you’re selling cosmetics, your target audience might be women aged 18-35 who live in urban areas. Knowing your target audience makes it easier to reach out to them and introduce your offer.
Let’s say young women up to 35 years old are heavy users of social media platforms like Instagram, Facebook, TikTok, and Snapchat. You can launch social media marketing campaigns to reach out to them and use influencers for marketing your products. You can also host events in popular nightclubs or fashion shows frequented by this demographic.
4. Not Paying Yourself First
Studies show that 51% of people who start their own businesses don’t pay themselves for the first few years. Since they’re just starting out, they think all the money should go toward growing the business. While it’s important to reinvest in your business, you must also take care of yourself.
Paying yourself first doesn’t mean withdrawing all the profits and living lavishly. It simply means setting aside a fixed percentage of your income to cover your personal expenses and have some savings left over. This way, even if your business isn’t doing so well, you won’t have to worry about being unable to pay your bills or put food on the table.
Giving yourself a salary also has another benefit: it makes you more disciplined with your spending. When you know that you only have a certain amount to spend every month, you become more mindful of where you’re putting your money. You will be more mindful of your spending and only purchase things you need both for yourself and your business.
Starting a small business is a big undertaking with a lot of potentials for things to go wrong. However, by avoiding these four common mistakes, you’ll be well on your way to set your new venture up for success. Do your homework, start slow and steady, and always have a plan—and you’ll be well on your way to achieving your small business dreams.