Every year, thousands of people make the decision to start their own businesses. These determined entrepreneurs all set out to be successful, but in time, many learn a hard lesson: It takes more than blood, sweat, and tears to build and run a successful small business. In addition to the entrepreneurial spirit, you need business acumen, financial know-how, and meticulous attention to detail. 

Mistakes are inevitable in the hectic startup-business environment, but there remains little room for big errors. Having started a small business myself several times — one that I still own and operate jointly with two great partners — I’m familiar with the numerous issues entrepreneurs face on any given day. It is important to be aware of these issues — big and small — because if unaddressed, they can quickly cause damage from which it is difficult to recover. 

Throughout my career, which spans more than 40 years, I’ve observed the startup of many other small businesses. Some achieve success, but most don’t. Here are four common mistakes that small-business owners make, along with tips on how to avoid them.

Forgetting to do your research 

I’ve seen many small businesses go to market with great ideas, products, and services. The problem is similar offerings were already in the market, and there was little to no differentiation from the competitors. Your ideas, strategies, and planning may seem brilliant and bulletproof, but it will be difficult to bring them to fruition without adequate research. Know your market, your competitors, and industry forecasts before launching.

Leaving marketing out of your business plan

Marketing and communications should never be used to create false attributes, but as a way to inform prospects. Many entrepreneurs make the mistake of not adequately funding or planning for marketing and communications efforts. 

In the age of social media, some people believe that marketing can be done for free. While using the tools may cost nothing — or next to nothing — the time and resources it takes to strategically use and manage accounts can be consuming, especially if you’re a one- or two-person operation. Marketing and communications timelines should be built into your business plan, with detailed objectives, strategies, tactics, budgets, and execution plans. 

Not protecting your content with copyrights and trademarks 

When starting a small business, it’s imperative that you also understand U.S. copyright and trademark laws so that you can protect your creations — names, logos, slogans, and manifestos are all trademark-worthy content and important branding components that need this safety net. 

When creating your website, include the copyright symbol with content so that visitors know from where it originated. Also, routinely conduct searches for your content online to ensure that other sites are not copying your material without proper attribution. Of course, it is always smart to have an attorney on board from the get-go. Integrating the copyright and trademark processes into your business plan will protect your company and position it as an original entity within the marketplace.

Failing to manage cash flow

To set yourself up for success, there are three external experts every small-business owner should invest in from the very beginning. In addition to a marketing adviser and an attorney, you should absolutely have an accountant. Whether in your personal or professional life — and the line between these worlds will blur as an entrepreneur — cash management is crucial. Understand your financials, and speak openly and consistently with your accountant so that you know the state of your company in financial terms. Make sure that your cash flow is tracked meticulously to avoid any inconsistencies. 

While there are many mistakes a small-business owner can make, if you can avoid these four errors, you will be well-positioned to handle other issues that may arise in the future.                      

Ray Martino is a partner at Rochester–based, Martino Flynn, LLC (www.martinoflynn.com), a full-service advertising, public relations, and digital media agency with clients across upstate New York.

Do you feel as if you are slogging along instead of buzzing? It is business as usual but things are just not clicking? Sales are OK but not great. If this scenario resonates with you, then it is time to tap your strategic reserves. 

You need to drill deep, though, if you seek to isolate the real problems behind your sluggish performance. More often than not, strategy is formulated from a knee-jerk reaction to changes in the environment — low-cost manufacturing in China is eroding your competiveness, or your competition has introduced a new product with the market disruption power of the iPad. Causality should be considered in strategy, but it should never dictate it.

Good strategic planning is developed by understanding why you were vulnerable to these external factors in the first place. And only those with a deep understanding of your internal and external terrain can expose the underlying problems. Yet today, when we develop strategy, we are increasingly relying more on models than local know-how. Most of the pitfalls in strategic planning relate to leaving out the stakeholders — executives, management, staff, customers, and so on — from the planning process. 

Overdependence on the models

While the integration of technology into all facets of strategic planning has added tremendous value, it alone is not the solution for dealing with the increased complexity in today’s marketplace. Strategic planners are grappling with more diverse product offerings, increased competition, and more complex supply chains. And, of course, there is a model for that. Monte Carlo, competency modeling, and real options are all useful tools for drilling down into increased complexity. 

Moreover, it seems as if there is an enterprise software solution for everything. But the complexity of today’s challenges does not neatly fit into a database silo or algorithm. What you need is better thinking, and that thinking comes from people who are genuinely engaged in the process. Engagement requires a genuine alignment of the values and goals of the organization with those of stakeholders. 

The power of corporate culture

Everyone in the business media has been weighing in lately on whether culture has a greater impact than strategy on business results. The consensus is that culture trumps strategy if left unattended. The obvious response, therefore, is to ensure that corporate culture is taken into account in strategy planning. If your strategy involves elements that are counter to culture, it is more likely to be derailed by internal discontents. But if you have a bad strategy, all the employee motivation and health-club memberships in the world are not going to increase your sales. 

My advice then is to ensure that the strategy is aligned with your corporate culture. The way to accomplish this is to involve internal stakeholders in the strategy planning process. 

Oops, we forgot the leadership

Strategy used to be the domain of the boardroom and the executive office, alongside analysts who would crunch the numbers and report them to the higher-ups who would then decide how to use the data. Today, students start doing SWOT analysis in high school, and after four more years of SWOTs, graduate to strategy teams in corporations. Empowered, they perform business analysis and formulate the strategy for their divisions. 

Conducting the analysis closer to the business unit is smart strategy and execution but it can be risky if units operate in isolation. It is the leader’s job to link strategy to overall objectives and streamline planning. Telltale signs that that your pistons are not all firing together are failed products, lost customers or markets, failed bids for new business, and higher employee turnover. 

Manager buy-in

The disenfranchised manager is not a new problem to strategy execution. Managers need to understand why they are executing the strategy. One does not have to be a sports fan to know that the manager is the first one fired if the game strategy does not work out. Unlike managers of the Red Sox, Astros, and Indians this season, corporate-manager firings seldom hit the headlines, but these frontline managers understand that they are easy scapegoats, too. 

Manager involvement in strategy, however, should never be an issue. The identification of the underlying problems and formulation of solutions should take place at each level of the organization during strategic planning. Every manager should have a written plan for their area of responsibility.

Customer engagement

If you are communicating effectively with your customers, then you are doing the listening. The introduction of new products and price-cutting strategies from your competitors should not come as a surprise. Your customer will already have described the product to you. 

If you are not drilling down to your organizational lifeline and getting a pulse of what is happening from key stakeholders, then you are essentially playing the horses. You only have a 50/50 chance of reaching your destination. To improve those odds, you need to conduct strategic planning with those who are intimately familiar with the local geography.

Good strategic planning is never easy, never short term, and never episodic. It should roll from year to year, engage your best thinkers and doers, and be communicated relentlessly throughout the organization.       

Thomas Walsh, Ph.D. is president of Grenell Consulting Group, a regional firm specializing in maximizing the performance of organizations and their key contributors. Email Walsh at tcwalshphd@grenell.com