Top 5 Mistakes made by Small Business Owner's
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Self employment is a dream come true for many people. Unfortunately, many entrepreneurs mess up this dream by making some cardinal mistakes which lead to failure. The following are some major, in some cases very basic, mistakes made by small business owners.
Failure to Plan
You will be surprised how many people dive into a business without having a plan. Every business begins with a business plan. The business plan should be put down on paper and should cover the following aspects of the business:
- An overview of the business and industry in general
- An analysis of the market from an industry and customer perspective
- A specific marketing plan
- A specific financial plan
- A management plan
- An analysis of your strengths and weaknesses
- An analysis of your legal and regulatory environment
- A compilation of documentation that supports the validity of your business plan
Remember the old adage, "failure to plan is planning to fail".
Failure to Organize
A lot of people equate planning to organization. These two are vastly different. To put it in the simplest form possible, planning is charting the overall course the business will take. Organization on the other hand is arranging for performance of specific tasks. Learn to delegate and outsource the tasks that you can. Hire a virtual assistant to help you with repetitive jobs and tasks which are not part of your core business.
This is the main cause of business start up failure and arises as a result of failure to come up with an accurate financial plan, which takes us back to our first point. Many small business owners tend to underestimate their capital needs. Any accountant will tell you that the best way to go about financial planning is to underestimate your cash inflows and overestimate your capital requirements. This way you are unlikely to find yourself in financial trouble.
Failure to Brand, Market and Sell
It is also quite surprising how many entrepreneurs out there believe that they have a product that will "sell itself". It is quite ludicrous in today's competitive business environment to even imagine that your product is so good, it will itself. No matter how good your product is, a one line ad in the local newspaper won't do it. You have to sweat for it. You have to market and sell aggressively and build a recognizable brand for you to make adequate sales to grow your business.
Failure to Separate Work and Home Life
In the quest to become successful, small business owners sometimes overwork creating a stressful situation between them and their families. This negative effect on their social lives is not good for business and should be avoided. A stressful situation at work cannot be improved by creating another stressful situation at home. Keep your work and home life as separate as possible.
On the bright side, most mistakes can be undone and sometimes you have to make mistakes before you get it right. Thomas Edison made over a thousand attempts before finally inventing a working light bulb.
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