To make sure your small business is a success, steer clear of these common mistakes!
Though every small business is unique, research has shown that many small businesses fail for the same reasons. Regardless of industry, there are some common problems that tend to plague all new companies. Whether just starting your small business or growing it, you may want to avoid these mistakes and the potential devastating effects on your bottom line.
Paying Yourself Too Much
When first starting your business and seeing the money roll in, there may be a temptation to pay yourself for all of your hard work. This is almost always a mistake. In the first few years of your business, you need to pay your business first and yourself second. Small businesses take a lot of sacrifice, and you won’t be able to live the high roller lifestyle just yet.
Not Keeping Good Books
Good bookkeeping is absolutely critical for the purposes of cash flow. Without charting your income and expenses, you won’t know how much money you’re making. Without tracking your deposits and checks, you won’t know if you’re close to over drafting your account. Even worse, if you don’t have an accurate set of books you may not be able to procure a small business loan when you most need it.
Hiring Family and Friends
Family businesses can work well, but only when the family members involved are truly passionate about the business and well-suited to the position they’re given. Involving family and friends brings an emotional component into something that needs to remain professional. When you hire friends and family, it can be difficult to have those tough conversations that every employer has to have now and again.
If you feel as though you’re making some of these mistakes already, all is not lost. There are many opportunities for course correction with a small business. One of the benefits a small business has over larger corporations is the ability to turn on a dime. Once you have identified a problem, take quick action, reassess, and choose a direction that is in line with your goals and your business plan.Sources:
To learn more about small business loans and SBA requirements, contact me 281/384-2595.