Small businesses are a large part of the Canadian economy. There are a number of small businesses that range from retail, service providers, vendors and online shops.
With the ability to have creative autonomy and independence, many people are choosing to become small business owners.
If you are thinking of creating a successful small business yourself, here are the top 10 mistakes you should avoid:
1. Not preparing financial projections
It’s important for small business owners to prepare an estimate of financial projections.
Financial projections help you evaluate your financing needs and how much revenue you need to cover them. This process also helps you monitor your cash flow, adjust your pricing and change your production plans.
Having financial projections can help you create an effective budget and improve your decision-making process.
Another common mistake individuals make is to neglect financial planning and therefore failing to have the capital to keep their business afloat. That’s why it’s important to also focus on financial planning and ensure that you have enough capital for the longevity of your business.
If you’re looking for some suggestions, here is a list of financing options available to get you started.
2. Not having a business plan
A business plan is one of the most useful tools you can have.
It will keep you organized, keep your tasks consistent and help you measure your progress. Without an effective business plan, you can run into issues with preparation, goal-setting and organization.
3. Neglecting to create a marketing plan
Assuming that your business will naturally make a profit in the beginning without any additional efforts is a common mistake.
When your business is new, it’s especially important to have a marketing plan with strategies, tactics and a budget to reach your business goals.
To help you get started, take a look at this marketing plan template for entrepreneurs.
4. Hiring the wrong people
The people who work for you are a definitive part of your entire business. Right from the beginning, prioritize hiring the right people who align with your business objectives.
Define what exactly you’re looking for in employees before you begin the search. This includes specific skill sets, working styles and overall values.
Finding the right people for your business is essential to avoid a number of problems in the future such as:
- The loss of time for interviewing and screening new employees
- The loss of time and money for training new employees
- Reduced team morale and productivity
- Poor customer service
5. Failing to make goals and monitor progress
Goal setting is a very important part of any successful business. Goals can give you focus and motivation, and set targets for your business to work towards. Clear, well-defined goals will help you take control of the direction of your business.
But, setting those goals is just one part. If you aren’t also tracking your progress in achieving your business goals, you will miss opportunities. By monitoring your progress, you’ll be able to identify areas of improvement and discover new opportunities. You’ll also be able to create updated growth strategies and foresee any risks.
To help you get started, here’s a guide for helping entrepreneurs monitor their business performance.
6. Neglecting to create a support network
Starting a new small business can be intimidating, but having the right people around you can make all the difference. Whether it’s business colleagues to bounce ideas off of or a mentor that offers their guidance, it’s important to have a group of people to support you.
7. Investing in the wrong technology
One way or another, technology will be part of your business – whether you’re using technology to create products, track inventory, process payments or manage your bookkeeping.
That’s why it’s critical that you invest in the proper technology that is reliable and effective. By doing so, you’ll be ensuring that your business operations and customer service activities run smoothly.
8. Not preparing the proper legal work
With any business venture, there will be a number of legal processes and documents required.
If you’re new to the small business industry, the legal side of your business can be a bit daunting. That’s why it’s important to work with a friendly small business lawyer that understands what you’re going through and is there to help ensure that all your legal requirements are met.
If you’re planning on starting your own small business, we are here to help! Please contact us today.