The 10 Biggest Mistakes Made by Small Business Owners

  1. Forgetting to plan. Planning is often regarded as tedious and boring but without a plan, you will be wandering around in the dark. You need to know who your ideal customers are, how you are going to service them, what equipment or tools you need, how much to charge for your services or product and a host of other things.
  2. Underspending. You need to realise that you are going to have to spend some money in order to get your business off the ground. Largely this will be in the form of advertising and marketing. Until your potential customers know that you are there you will not make any sales.
  3. Overspending. Equally, don’t go berserk on advertising. Yes, you need to reach out to your customers, but a whole page in the local paper is going to cost a lot and may, or then again may not, bring you in a lot of business. Take it one step at a time
  4. Undercharging. Many new business owners think that the way to get business is to charge less than the competition. Not true. You will very likely get more business by saying something like “Yes, we are not the cheapest in the area, but that’s because……..” then blow your competition out of the water by explaining that you are so much better at what you do.
  5. Focusing exclusively on sales. Sure, you need sales. But you need to ensure that you provide a quality service that beats your competition hands down. Only that way will you survive.
  6. Giving too much credit. It’s easier to get sales if you give credit. However, until you get paid you have just given away your services or product for nothing. Any fool can give something for nothing. Don’t let customers get away with taking too long to pay.
  7. Forgetting about VAT. It has to be paid every quarter. Once a week add up all your VAT and PUT IT INTO A SEPARATE ACCOUNT. You can earn a bit extra if it is a deposit account. Don’t use the VAT to run your business or you won’t have a business.
  8. The same thing applies to tax.
  9. Doing everything yourself. It’s hard enough getting a business off the ground without coming home and doing the books in the evening. Delegate or outsource jobs that you are not very good at or find tedious and concentrate on making a profit.
  10. Having too small a group of customers. You should never, ever have more than 10% of your turnover with any one customer. It is all too easy to fall into the trap of the customer who gives you more and more business until half of your time and effort is spent servicing that customer. What if that customer goes broke? Or simply takes his business elsewhere? If a customer goes broke and he is 10% of your business you will probably survive. If he represents 50% of your business you are dead.