Like a butterfly, small businesses tend to have short lifespans.
That’s partly because small businesses, by their very nature, have fewer resources to draw on when times get tough — or even when they are too good.
With the odds stacked against them from day one, there are at least as many ways for small businesses to fail as to succeed. Here are 10 common mistakes for entrepreneurs to avoid, drawn from 20 years of experience from CPG Executive Consulting & Entrepreneurs Worldwide founder Helen Roberts and Start Up Britain Champion for Richmond, London.
1. Getting married to your idea. Not every idea is a good business idea. We encourage our small-business owners to go through a process of testing their idea by doing research, by speaking to other business owners and really testing to see if it is a viable business.
2. Not doing enough research. Similar to the first mistake, entrepreneurs often fall in love with their latest ideas of products or services without doing the necessary groundwork.
3. Not worrying enough about the owner/CEO. “By taking care of yourself, you can help ensure that you maintain that enthusiasm and positive attitude, which is so much a part of a small-business owner.
4. Failing to create and stick to a plan. Small-business owners hate to hear that advice. But a business plan helps you think through all the strategic elements and discover where you might need a Plan B.
5. Making yourself irreplaceable. (Entrepreneurs) don’t develop systems and processes, so the business relies too much on them.
6. Lack of money. Small businesses often run into trouble because they run out of capital to grow the business or survive a slowdown.
7. Losing touch with your customer. Sometimes in the day-to-day, crisis-to-crisis environment, there is the potential to miss an opportunity, identify a fatal flaw or see what your customer is doing.
8. Undercutting the market, and your business. Too often, small businesses undercharge for their products and services.
9. Going it alone. Small-business owners often tend to be islands unto themselves. That independence can be positive, but the risk is missing out on a “wealth of information and wisdom” from those around him or her.
10. No marketing or sales focus. You may have the greatest product or service in the world, but it rarely sells itself. Getting caught up in the day-to-day minutiae, and not getting the word out or contacting sales leads, can mean slow growth or even a slow death for your business.