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 […]
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.