Koby Korman, Next Insurance
Having a small business can be an exciting adventure, full of possibilities and freedom. Many people decide to become self-employed to gain flexibility and capture the entrepreneurial spirit. While this may seem like a dream to some, running and growing your small business can be quite difficult and often complicated.
Whether you’re a one-person-show or have employees, you are ultimately responsible for making sure the business runs successfully. In order to grow correctly, we recommend avoiding some common mistakes many small business owners make when trying to grow their businesses. We know this is an exciting time, but make sure to proceed with caution!
Top concerns among small business owners
As a small business owner, you’ve got a lot on your mind and want to make sure everything runs as smoothly as possible. Many business owners are (understandably) worried about their income, expenses, and competition. By avoiding the top four business mistakes, you’ll find it much easier to manage your income and expenses and stay competitive.
Income: Salaried employees know how much they will make each month and can create a reliable budget around this fee. As a business owner, stability is often lacking. How much will I make this month? Where can I find new clients? What’s going on with the economy? These are all questions that will keep you up at night. When evaluating the success of a small business, not only is the overall income examined but also its stability over time.
Expenses: Depending on the business, your expenses may be large. Do you need to buy equipment and tools to complete your job? If you are a product-based business, you most likely need to renew your inventory regularly. While many expenses are tax-deductible, they can halt your cash flow and cause stress if not managed properly.
Competition: In many cases, competition is a good thing—it shows demand. However, many small businesses are overwhelmed, staying in line with competitors and trying to make themselves stand apart.
Don’t let these 4 mistakes get in the way of growth
You’ve probably heard that many small businesses fail within a few years. Between 2005 and 2017, on average, almost 80% of new businesses survived their first year. Only half made it to the five-year mark. These numbers show the need to grow and plan your business carefully if you want to stay afloat for a long time.
1. Not hiring for expansion
Most businesses dream of expanding and increasing revenue and profits. If you’re starting to see significant growth in your business, that’s great news. But you’ll need to plan your resources as well. As talented and professional as you are, there’s a limit to how much you can take on. Hiring the right people at the right time is critical for success in small business. Not only will you need time to hire employees or freelancers, but you’ll also have to train them properly. Advanced planning can help you avoid stress and unpredictable circumstances.
2. Not purchasing business insurance
Every small business needs business insurance. Insurance gives small business owners peace of mind and covers them in unplanned or unexpected circumstances. Business insurance can cover you if a customer gets injured at your location or an employee gets hurt while on the job. Even if you believe your product, equipment, or work environment are perfect, insurance is essential for small business growth. Do you have employees? Additional equipment? New services? Not only does insurance keep you safe, but it can help you through the “learning curve” when it comes to expansion, new regulations and services, and more.
3. Not having a marketing strategy
Many businesses struggle with marketing. They don’t know how to approach it, how to do it, or what kind of budget to set. Having a marketing strategy in place is one of the first steps to growing any business, no matter the field. A marketing plan answers how you’re going to reach new customers, engage with current customers, and entice customers to stick with you in the future.
A marketing plan will make sure that you are spending the right budget in the right way. Investing too much in marketing that doesn’t bring in the appropriate leads will inevitably cause financial difficulty. On the other hand, if you are unable to anticipate the number of leads that you’ll generate and too many come in (in theory, a good problem!), you’ll need to have the right staff and tools set up to handle the increase in work.
4. Not doing appropriate market research
If you’re considering new services or products at your business, do the proper market research. Depending on your field, market research strategies will differ. They may include surveys and gathering information from your target market, front-to-front meetings with potential customers, and competitor research. While you may be excited about the potential of a new service, if your customers don’t want it, you’ll waste time, money, and effort. And remember that your target market doesn’t mean your family and friends. Only by researching properly and understanding market demands can you decide on new offerings.
Important lessons when growing your business
Growing your business is a great sign of success. Good work! We know this can be an overwhelming time, full of questions and uncertainty. Carefully managing business growth can help any small business increase income, manage expenses, and keep up with the competition.
Koby Korman is a marketing expert by day, a web developer enthusiast by night, and part of the marketing team at the hyper-growing next-insurance.com. Feel free to reach out to him on (almost) any social platform.