Running a business can be scary, grueling, overwhelming and exhilarating. If you have your own business or are thinking about starting one, it will probably be one of the most important and risky investments of your life. The process can be so time-consuming that it’s easy to get caught up with the day-to-day responsibilities and overlook broader factors that could make -- or break -- your business. Here, eight common mistakes you want to avoid as a small business owner.
Mistake #1: Having unstructured goals. Without structure for what you want to accomplish with your business, you’ll set yourself up for a lot of disappointment and frustration that could lead to your business’ early demise. Make sure that your goals are SMART: Specific, Measurable, Accountable, Realistic and Time-Sensitive. And have SMART goals for the short (1-3 years), mid (4-6 years) and long-term (7-10 years).
Mistake #2: Not having a business plan. Business plans are vital, even if you're not seeking startup capital from investors. They help you pull your head out of the clouds and get a grip on reality. A good business plan should include a thorough analysis of your target market and competition, financing needs, cash-flow estimates, and a break-even projection, among other things.
Mistake #3: Under-funding. Not having enough startup money can force you to tap personal savings or go into unplanned debt and jeopardize your or your family’s financial stability. Doing a proper business plan can help you understand what you will need for your business to survive through the startup period and avoid putting yourself and potentially your loved ones in a precarious position.
Mistake #4: Poor risk management. Better to be safe than sorry, right? Think of the worst things that could happen to your business and then insure against them. Make sure to protect all of your assets, including space, equipment, yourself and any other key employees. This means budgeting for and buying adequate property and casualty, liability, disability and life insurance.
Keep reading for 4 more common mistakes