Thirty-two million small businesses power the U.S. economy. They account for half of all sales in the United States today. (US Chamber of Commerce)
Many small business owners are motivated by the opportunity to pursue the passion that drives them forward. You started a business because you wanted to follow a passion of yours. As a hairdresser, you enjoy making people look their best, so you decide to become your own boss. Or perhaps you worked at a local restaurant and were finally ready to open a place of your own. Maybe you were knitting scarves to generate some extra income and decided to turn your hobby into a profitable business.
Passion gets you started, but passion alone is not enough to make a business succeed. Whatever your story, you should know that 20% of businesses fail within the first two years, and nearly 50% do not survive the five-year mark. (Entrepreneur, 2021)
It’s no secret that owning a business can be financially rewarding; however, it will not happen overnight, it’s something you have to work at for several years, and it all starts with believing it’s possible. You have made the leap into the world of entrepreneurship and that should be celebrated. With the right help from the experts, your business can go from “survive” to “thrive” mode.
“Being a small business owner is no small task.”
Barry McCarthy, CEO – Deluxe
Most small businesses still operate the old-fashioned way – basing their decisions on limited research and trying to be their own experts. In order to succeed and outperform competitors in this environment of constant change, a different way of thinking is needed. Without it, small businesses may succumb to a number of potential pitfalls that will undermine their goals.
Hostopia is committed to helping small businesses thrive. Our experience has revealed the five common mistakes small businesses make. Follow along as we provide more information on these pitfalls and steps you can take to avoid them.
Having a business plan that lacks a defined value proposition and SWOT analysis
Starting a business is exciting. Many small business owners tend to invest most of their time trying to find the perfect name, setting up social media handles, or maybe even getting a website. Those are all essential activities but developing a strong business plan is critical to the long-term success of your business.
Your business plan is a roadmap – it highlights your goals and objectives and the steps required to achieve them. It should have a detailed strategy around operations and finances and a clear value proposition explaining how your product fulfills a need, communicates the specifics of its added benefit, and states why it differs from similar products on the market. The ideal value proposition is succinct and appeals to a customer’s strongest decision-making drivers.
Lastly, develop a SWOT analysis to clearly define your company’s strengths, weaknesses, opportunities, and threats. SWOT analyses current market conditions and helps position for the future – don’t make the mistake of preparing a SWOT analysis and then ignoring it as go.
Trying to do it all yourself
Some small business owners lose precious time by trying to do everything on their own. If you have plumbing issues, you rely on an experienced plumber to fix your plumbing. You rely on an accountant to keep your books in order. Similarly, to truly grow and scale, you sometimes need help from specialists so that you can focus on what you do best.
Although it’s good to know all aspects of your business, don’t shy away from relying on experts to help you in other areas of the business, including payroll, branding, digital marketing, payments, and more. It is evident that budgets are tight, and you may be tempted to do it all yourself, which may not only lead to burnout but also may end up costing you more in the long run.
Common business functions that tend to be outsourced include:
- HR and Payroll
- Digital Marketing
- Content Creation
- Customer Service
Pro Tip: Outsourcing elements like website design will save you time and money. If web design is not your strong suit, you can lean on experts to do it for you. Plus, Hostopia website design packages are very affordable, which means that you don’t have to dish out thousands of dollars to get a beautiful online storefront.
Lacking a solid marketing strategy
You may be tempted to create your social media pages and start posting business content on Instagram, Facebook, TikTok, and other platforms because that’s what everyone else is doing. That’s great, but without a thoughtful marketing strategy, your efforts might be going to waste.
Most small business owners have an urge to skip many steps for marketing as possible. You should know that competition in every industry has grown fierce, and marketing is no longer ornamental; it’s a necessity. Formulating a solid marketing strategy, the specific tactics you’ll use, and how much they’ll cost dramatically increases your chances of success.
Not investing in your branding
Many new business owners and entrepreneurs neglect the importance of a strong branding strategy.
There has recently been so much competition in the marketplace – it is imperative that your brand needs to be distinctive. Your branding will be the first look at your execution. People buy from brands they can relate to, know and trust. In today’s digital world, branding and online reputation are critical to the success of any business.
Did you know?
On average, small businesses spend between $300 and $1300 on their logo. Source: Zippia, 2022
You should be splurging on branding because no other factor will impact your conversions more than a good design. Having a professional brand that people come to know is essential. Maintaining that brand image with existing customers is even more important, especially to keep customers coming back.
A great logo can:
- Elevate the look & feel of your website and business cards
- Create a lasting impression on your customers when used on merchandise products like calendars, pens, t-shirts, hats, etc.
- Help you advertise your business when used on storefronts & company vehicles
Pro Tip: A great company logo design can make all the difference in whether your business is being taken seriously or not. To elevate your logo, let Hostopia design services help you. Our professional in-house designers will work with you to understand what you want to achieve and then get to work creating it. Or design it yourself with our easy-to-use logo design tool. At Hostopia, there are many ways to create a brand mark you will love at an affordable price point.
Not sticking to a budget
The most common pitfall for new business owners and entrepreneurs is the point they reach where they’ve run out of money. The importance of having a tight and strong budget cannot be stressed enough. But, more than this, what good is a strong budget if you don’t stick to it? When starting a business, this is the key to long-term success: budget and budget well, then stick to it!
Here are a few suggestions for helping you stretch every business dollar:
- Make sure that your budget aligns with your business strategy
- Don’t spend all your budget on something you haven’t tried before
- Update your budget every time the marketing conditions change
- Set aside some contingency funds
- Get help from professional accountants