The US Bureau of Labor Statistics tells us that 20% of new small businesses fail within the first two years of operation. When you look at that on a national level, that’s a significant number of small business owners who’ve achieved their goal of owning their own business, only to watch it crumble shortly after opening.
This devastating stat not only makes you wonder how those business owners felt when they had to shut down their businesses but more so, what exactly went wrong to make their businesses fail?
“How could this happen?”
“I knew I should have done that sooner than I did”
“If I could do it again, I would.”
These are all thoughts and questions that go through the minds of entrepreneurs whose businesses have failed…
The truth of the matter is that there are a number of reasons why businesses fail. Everything from hiring the wrong people to neglecting to implement effective marketing efforts, the moment you become a business owner, your business is at risk for a multitude of mishaps… One wrong move can cost you your entire business.
Unfortunately, as a business owner, there is no full-proof way to completely avoid the risks associated with running your own business. But, not all hope is lost. The key to success is being aware of the factors that can cost you your business and work to avoid them at all costs. In other words, if you know what you’re up against, you can avoid unnecessary mistakes.
True enough, depending on the type of business you’re running, you might be at a higher risk for certain calamities than others, but as long as you’re aware of the potential threats your business could be up against, you can make great efforts to avoid making the same mistakes as business owners who’ve come before you.
Here are a few of the biggest mistakes small business owners make and how to avoid making those same ones.
Table of Contents
Hiring the Wrong People
With every business, it’s common to have a great team with a few “bad apples” in the bunch. It’s not like businesses intentionally hire bad employees but sometimes they slip through the cracks, and there are different factors that play a role in it. Things like not checking references, rushing the hiring process, and not giving performance tests are some of the biggest hiring mistakes businesses make that sometimes can cost business owners irreversible reputational damage and sometimes lawsuits.
How to Avoid This Mistake
Check all professional references, be sure to clearly state the job description, specifications, and responsibilities so that there won’t be any confusion if a potential candidate is hired. Also, once a candidate is hired, it’s important to make sure you have an effective training program in place as well so that the expectations can be set from the very beginning.
Neglecting to Obtain Proper Busines Insurance
Owners of brick-and-mortar stores don’t typically make this particular mistake because most times business insurance is required for physical stores, whether by the state or office building. Now, owners of online businesses tend to get lackadaisical when it comes to obtaining business insurance simply because they feel that they don’t need it when they’re not operating in a commercial building… This is why failing to get business insurance made this list.
What lots of business owners fail to realize is that depending on the business they’re operating, and if they’re providing products or services, they will not only need general business insurance but they may need multiple different policies to ensure proper coverage of their business.
How to Avoid This Mistake
Speak to a business insurance provider to determine the proper coverage you need based on the type of business you’re operating. You may just need one policy, then again, you may need multiple different ones to ensure your business is fully covered. Not doing so can result in lawsuits and ultimately, the closing of your business.
Failing to Properly Invest in Marketing
In the business world, there’s absolutely no way you can think about scaling your business without proper marketing, right? Of course! Well, if that’s the case, why do so many small business owners fail to properly invest in it?
True enough, when you first start a business, there are some tasks that take more precedence over others but marketing isn’t one of those tasks to put on the back burner. Without marketing, the world wouldn’t know your business exists! And in the digital era we live in today, digital marketing is extremely important. Unfortunately, some business owners don’t see it that way.
How to Avoid This Mistake
INVEST IN MARKETING! This can’t be stressed enough. Marketing is your ticket to success! When people know about your business, they’re more likely to shop with you. Lots of businesses will oftentimes create business pages on social platforms, which is great, but it’s not enough.
To truly invest in marketing, and your business actually benefit from it, it’s going to require investing in a digital marketing firm to increase your online visibility in more ways than just social media. This can be pricey at times, but it’s well worth the investment. By investing in digital marketing, your business will be at the forefront of a much larger audience and you’ll receive search engine benefits through SEO efforts, making your business more accessible to customers.
If you value your business and want it to succeed, don’t make this mistake. Properly invest in marketing.
