Owning a business is terrifying and exhilarating all at the same time. The fun part is that you can do something you love while making money. You are your own boss and can make your own decisions, and everything will make or break based on what you do and is not dictated by someone else. However, that can also be terrifying. If something goes wrong, you are the one responsible and will be the one holding the bag at the end of the day.
The fact is, many businesses fail in the early going. Sometimes there are simple reasons, and other times the cause is much more complicated. Some businesses can go years without an issue, and then a mistake they’ve been making becomes apparent, and it all crumbles down. If you own a business, there could be something wrong that you haven’t identified that will cause huge repercussions down the road. You might also be missing something that is costing you money right now, and you don’t realize it. Here are six horrible mistakes you are making with your business that you need to identify and fix right now.
You Don’t Have Professional Contracts
To run a business, you need clients. When you work with clients, there is always a bit of trust that is needed. You produce a product or service, and you expect to get paid. Likewise, the client expects to get the product or service they paid for. Mostly this can work just fine. However, what if a client just decides not to pay? If you don’t have a professional contract, you might be out of luck. You will then have to choose whether to eat the loss or to take your client to court, which could cost you more than the original loss.
It’s always good practice to have contracts in place with your clients if you are a service and remote-based business. It’s even better to ask for a portion of the funds upfront. Many businesses go with 50%, but you can choose what works for you. This provides you with some protection in case the client decides they won’t be holding up their end of the bargain.
Many entrepreneurs start out with very small teams or even with just themselves. Everyone works long hours to save money and maximize profits. While this might work for an initial phase of a business, it won’t work in the long term. We are all human, and we can all get burned out. The longer you try to work long hours, the worse your quality of work will get. Not only that, but your small team or partner will get burned out too, and probably move on to other things. Once your work starts suffering, things can unravel very quickly. Clients will get upset, emails will go unanswered, and you will find that everything you’ve built to that point is circling the drain. While you should be smart out about it, identify when it’s time to grow your team to match the growth of your business. It might stunt your profits for a while, but you will be better off in the long run.
There are certain things that small business owners think they go without investing in. Insurance should not be one of those things. Too many people think that they won’t need insurance if they are very careful, so don’t buy it. Or, they assume that their business is so small that no coverage is worth it. However, this is simply not the case. No matter how small your business is, you probably can’t afford to pay to replace your office or building. You may not even be able to replace your laptop if that’s all you have.
Buy liability business insurance so that it’s in place at all times. You might think that the odds are against you ever being sued, but businesses are always taken to court. Diligence when it comes to safety is great, but that doesn’t mean an accident can’t happen. If you have property or equipment, then there is always the chance that something could happen, such as a natural disaster or vandalism. Don’t take chances. Make sure that you have protection against these costs so that an unfortunate incident doesn’t sink your business.
Not Understanding Your Target Audience
If you don’t understand your audience and customers, you won’t be as successful as you want. You might grow at an acceptable rate, but you might also leave money on the table by not marketing yourself effectively or efficiently. Have conversations with your customers. Get an idea as to what they generally like and what demographics they fall into. You can then develop improvements to your products and services that will match what they are looking for. Plus, you can craft your marketing to better align with the demographics that are more likely to purchase from you. Understanding your audience and your customers is vital to growing your business to where you want it to be.
Neglecting Organic Traffic
It’s easy to pay for advertising. It might be effective for you, but then you have to keep paying that cost every month to keep your momentum going. Organic website traffic is important as it means that the people visiting your website are already favorable to buying your product or service. This takes some extra work, but you must make the investment.
You can get more organic traffic by using effective search engine optimization (SEO) strategies. For example, write informative blog posts that contain certain keywords that your target audience might enter into search engines. The goal is for your website to appear high on search engine rankings so that it is visible to the audience. As a result, they are much more likely to click on a website on the first page than they are for the second or later pages.
Self-Doubt and Imposter Syndrome
One of the most important things that hold businesses back is self-doubt on the part of the owners. You can’t let your concerns about your own skills and talent override what you see happening. If your business is growing, it’s not by accident. Your hard work and creativity is moving it along. Don’t compare yourself to other entrepreneurs. Choose your own path and be confident that you are either on the right one or will know when it’s time to choose a different one. If you’ve launched and grown a business, then there’s no reason to think that you won’t be able to help it reach even higher levels going forward. Be smart and bold, and you will do just fine.
Mistakes in business can be big or small, but they will all cost you money. So make sure that you avoid these common ones and give your business the protection and resiliency it needs to grow and be successful.