Most of today’s small businesses experience failure during the first few years of their operation. Whether it’s a lack of planning at the beginning or some other pitfall, there are common mistakes you need to avoid in order to stay alive. You can boost your company’s chances by avoiding the six following mistakes.
1. Begin Your Business with a Huge Loan
The first two years of business is critical for small business owners. Since many fold at the beginning, you want to ensure that you’re getting the most out of your employees. Although you want to focus on efficiency and meeting deadlines, you also want to set a positive environment for your employees to work in.
A small business owner should also refrain from borrowing huge amounts of money at the start. This can leave an owner feeling pressured to see profits. The best approach is to work with your savings to pay your employees and advertise. As your business grows, and you develop a good business plan, you can consider other methods such as a loan.
2. Not Generating Immediate Profit
It can be hard for a small business to see any type of profit during the first couple years of business. That’s why it’s important to pick the right marketing campaign. When you’re looking to drive sales and boost your company’s brand exposure, DRTV campaigns has an award winning team of experts. Whether you need a compelling script written or the production of your infomercial, the DRTV production company in Fort Lauderdale can help you catch the right online presence for your company.
3. Spending Large Amounts of Money at the Start
Setting up your business can take a lot of money at the beginning. Furniture, equipment, brochures, business cards and a website can prove costly. At the start, you want to manage your budget wisely. Determine the amount it will take to operate ahead of time and try not to spend a penny more. As your business grows, you can update your business plan and expenses.
4. Hiring too Many Employees
You’re going to need knowledgeable people to make your business a success. But hiring too many employees can leave you open to costly record keeping and registration requirements. You will also have to pay worker’s comp insurance, unemployment taxes, withholding and other costs. If you don’t follow the required laws, you could also face penalties for your mistakes. Until your business has grown, you may want to rely on temp agencies or independent contractors.
5. Renting Office Space That’s Not Necessary
When a business is at the early stages, you may not need a lot of office space. You may even be able to work from your home office. Before you tie yourself to building ownership or a lease, you want to determine how much space it will take to operate. If all you need is a few computers, you can have your employees work from home. If you need a warehouse to ship product, look for something smaller in size.
You should also sign a short term lease rental in case you need to downsize or rent something larger.
6. Failing to Collect Bills
One of the biggest issues for a small business is bill collection. Although you want to have a good rapport with your customers to gain new business, you also want them to pay on time. Try offering a small discount as an incentive to clients who pay within net 10. You should also have a plan in place to collect the monies that may be owed to your business. If they pay late, asses a fee for customers who are delinquent in paying their bills.