What’s the biggest mistake that new small business owners make?
Spending all their time working in the business rather than on the business.
When you do this, you spend your days reacting to things, running around putting out fires rather than doing anything proactive. You might as well be an employee because you’re still being told what to do.
And you’re dooming your new business to failure – because ultimately small businesses fail because of poor planning and you’re not getting to do any.
Instead, why not start your business off on the right foot and start working on the business right away, organizing for success rather than letting events overwhelm what you want to do?
Organizing for success means budgeting both time and money before your business opens and during your first year of operations for:
- Business Planning
Recognize that once a year business planning is not enough. Objectives and goals need to be set and reviewed regularly. Specific projects will require their own action plans to be set up. And many small business experts advise that small businesses should have a succession plan from the get-go, rather than waiting until an owner or owners are thinking about retirement to create one.
Ideally, your new business should be marketing before it even opens. But it’s also crucial to keep actively marketing your business once it’s operational. Marketing plans will need to be continuously renewed and updated as you experiment with different strategies and create different campaigns.
From the instant you start planning your new business, you need to know exactly where the money is going, which means choosing and setting up an appropriate accounting system has to come first, not later. (Note that you will be able to claim many of your startup expenses if you have the receipts and a clear paper trail – one of the things an accounting system provides.)
- Establishing/Updating Operating Systems
One-person and one-partner businesses are notorious for ignoring these and flying by the seat of their pants but getting these systems organized ASAP will make a huge difference to your business’s daily operations. Three that need immediate attention and should be in place before startup are:
Management: From your chain of command through your operating manual, how things are going to work and how situations are going to be dealt with has to be spelled out.
IT: Who’s going to be responsible for ordering, configuring and troubleshooting the computerized devices used in your business? What related policies do you want management and staff to follow?
Data security: How are you going to organize and store your business data? Who will have access to it and how? How will you secure it, especially sensitive customer data?
These are of course only some of the aspects of your new small business that you’ll need to think about and, in most cases, create tangible plans for. But the time you spend working on any one of these is time better spent than time behind the counter of your business. An employee can do that. But only you can organize for success.