5 Common Small Business Mistakes (And How To Avoid Them)

1. Technology: Everyone in small businesses understands the need for technology but don’t truly understand what really makes it valuable to your business. Valuable technology has really only two purposes: to make you money and to save you money, period. Although that sounds rather generic, the truth is technology’s primary function is recording data; therefore, the data your systems are using should increase client retention or decrease the time spent on your staff or product fulfillment. Finally, don’t undervalue your technology; don’t pinch pennies here because the right technology is the foundation of your business.

Essentials for technology:
A. Website for lead generation
B. Contact management system for recording clients’ sales history
C. Secured network for growth, sharing, and remote employees (sales team)
D. Technical consultant for helping you determine the best and most cost-effective software and hardware for your company
E. Powerful e-mail marketing system
F. Good accounting software

2. Marketing: Many small businesses don’t think much of marketing until their sales are slumping or they are not generating enough customers (or enough revenue). To compensate for this error, we begin panic promotions, which usually will not lead to greater sales or more clients.

Essentials for marketing:
A. Marketing is essential for business growth and should be implemented before the doors open and continue throughout the business life cycle.
B. Marketing and sales are not the same thing (marketing generates sales leads).
C. Develop a marketing plan and stick to it for a minimum of 90 days.
D. Review and refine your marketing plan consistently; what works for the grand opening may not work next year.
E. Develop a marketing budget and stick to it; marketing is a business cost and should be treated as importantly as your rent (if not more so).
F. Remember “If you open, they will come” is a myth; only marketing will get clients to your business.

3. Know or learn your customers (market research): In my opinion, it is better to know who your customer is before you open the doors, but for the young entrepreneur, this is seldom the case. The good news is if you have done steps 1 and 2, this step will be a little easier because you will have the data to help you see who your true customer is.

Essentials for market research:
A. Know what your best and worst selling items are.
B. Determine the clients’ gender, race, and socioeconomic status.
C. Send out surveys (including some form of incentive).
D. Determine the clients’ buying patterns (every month, week, or year).
E. Include new information in the marketing plan.

4. DIY (do it yourself): Of the entire group of successful entrepreneurs I have met, they all had one thing in common: they did what they were good at and delegated the rest. We all have strengths and weaknesses; as a small business owner, you don’t have the time to correct your weaknesses, so focus on making them irrelevant to your success instead.

Essentials for business management:
A. Delegate effectively.
B. Use technology.
C. Prioritize your strengths.
D. Delegate all weaknesses.
E. Use outside talent when necessary.
F. Hire based on the company’s weaknesses.

5. Being too nice: Most small business owners develop a peculiar bond with their employees and a fear of their clients, which develops to this unique situation. The employees tend to feel that they can do what they want in the company as opposed to what they are told; your business is not a democracy. As for the client side, many new small business owners are afraid to charge what they should or believe they should be cheaper than the competition; nothing could be further from the truth. You charge what your value proposition supports, period.

Essentials for employee and client relations:
Employees
A. Hire slow; fire fast.
B. Business is not a democracy (you are king/queen).
C. Personal feelings have no place in business.
D. Hire to fill a company void.
E. Develop an employee handbook.

Clients
A. Prices are not negotiable.
B. Friends and family are still clients (if they are friends, they would understand that this is your livelihood).
C. You can’t be “all things to all people.”
D. Don’t be afraid to say no.
E. Apologize as well as stand your ground when necessary.

Best wishes,
Darrin Jackson