Making a mistake in life and business every now and then is valuable for our learning curve, and teaches us several important lessons. However, you don’t want these to happen too frequently, especially in business. 

If you want your company to be successful year after year, you need to avoid certain missteps that plague many businesses. Running a business demands a great deal from us in the way of skills, organization, training, communication, ongoing education, creativity, and leadership. Within each of these areas, we have wins and losses. The goal is to rack up more wins and come out ahead every day. Let’s look now at some common business mistakes and what to do instead to ensure long-term success. 

1. Not Writing A Clear Business Plan 

One of the most common mistakes that business owners in Silicon Valley and in other industries make is not writing down their business plan. It is impossible for you to guide your organization in the right direction when you don’t have a business plan in place, and one that is broken down in clear, attainable steps. 

When you write a business plan, you get to create a sustainable business and stand out in the market. It is important that you define your business idea in detail and create a strategy that focuses on attracting your customer base, maximizing resources, marketing effectively, and attracting great talent.   

Once you write your business plan down, you will have a clear idea of what you plan to achieve. As a new entrepreneur, you’re likely to begin your venture without considering the big picture. This will prevent you from understanding your market and from getting your finances and logistics in order. Moving forward with a strong plan is the best foundation you can give your organization. 

2. A Failure to Focus on Cash Flow

Another mistake that business experts suggest new startups avoid, is overlooking cash flow. You have to pay attention to your cash flow to remain solvent, manage payroll accurately, and make the most of your profits.

It doesn’t matter how much growth you’re seeing or how fast your company’s rate of expansion is, you must still have enough freed up cash to meet all your expenses. Understanding cash flow will also help you take advantage of loans, build excellent relationships with banks and other lenders, and find strategic partners.

To determine how profitable your company is, you have to monitor your revenue and expenses. This will enable you to maintain your cash flow and make necessary changes early on to avoid other problems later. 

3. Not Assessing Market Idea

Failing to conduct market research is one of the biggest mistakes that you can make. Even if you plan on catering to niche markets, you still have to find out if your business idea is viable. By learning about your competition, you will be better able to differentiate your offerings from those of your competitors. 

You should never dive into a market without first understanding your audience and marketplace. You need to determine the demand for your product and adapt your model to both fit and lead in your field.

In order to learn more about the market landscape, you have to conduct extensive research. Consider the following.

• Customer habits
• Press coverage 
• Social engagement
• Online reviews
• SEO (Search Engine Optimization) rankings
• Talking with other entrepreneurs
• Studying sales figures for similar products and services for the past several years

4. Spreading Your Business Thin 

A huge mistake that new businesses make is spreading themselves thin by selling too many products. If one product doesn’t do well, you might be tempted to introduce more products to attract customers. You also might have a few very successful products and assume that adding to your roster will mean even more success. However, success is never a guarantee. 

Your target audience might not be interested in what you have to offer. Your decisions might alienate loyal customers too, if your new offerings take away from the original experience or simplicity of your products. 

Still, they might be successful but you need to make sure you have the infrastructure established for production, distribution, and quality control, so you can meet the growing demand. For a while, try focusing on the products that are performing well. If you want to attract more customers, you have to establish a brand that is centered on your core values and meeting customer needs consistently. Later on, once you’ve built a solid foundation, consider expanding. 

5. Overlooking Organic Marketing

If there is one thing you need to realize, it is the fact that organic marketing is a big deal. You might overlook the potential of organic marketing, which includes blog posts, case studies, guest posts, unpaid tweets, Facebook updates and more, and end up spending too much money on paid ads. Of course, it’s important that you rely on ads as one part of your marketing strategy, you still have to focus on organic content marketing. It not only helps you generate more traffic but build stronger, long-term relationships with your customers. 

Even though the cost of organic marketing might seem high initially, it is worth it. Since 70% of clicks go directly to organic search results, you have to get it right. It is important that you create content based on the needs of your customers rather than just your business model or programs. 

6. Not Offering Incentives

To get people to take an interest in your products or services, you sometimes need to offer limited amounts of free or value-added items or services. Of course, you don’t want to overspend on these, but there are ways to create intro programs, informational services, or simple products that provide valuable information or enjoyment to get people connected. 

The primary goal of incentives is to use these perks as gateways for marketing, brand building, and more organic advertising. These offerings allow you to get people signed up for your newsletter, monthly service, or other memberships. This allows you to keep an open dialogue going with your audience.

7. Not Seeking Help

There is just so much that business planning can achieve. You have to get the right help if you want to succeed. Common areas where we often need help are with IT management, custodial services, bookkeeping, innovation and creative development, strategic investment, finance, engineering, outside consultation and in simply hiring the right employees. Developing partnerships with talented and experienced individuals across multiple fields gives you access to far more resources, knowledge, and creative power than you would have by yourself. 

Being an entrepreneur doesn’t mean that you have to take on everything on your own. It simply isn’t possible and the attempt will only wear you out. You have to think about the opportunity cost of doing too many things on your own. While doing everything might sound great, especially if you’re someone who likes to control everything, it tends to be time-consuming and will prevent you from building business relationships and coming up with new ideas. 

8. Not Knowing Your Target Audience

A common business mistake that you have to avoid at all costs is not knowing who your target audience is. You have to perform quality research if you want to succeed. Once you have come up with a product idea, you have to learn more about your customers. It is not an easy job to hunt down customers when you focus on building a product first instead of understanding your customers and letting them guide you. 

Building a customer profile is the name of the game. Take time to process consistent conversions if you want to succeed. It will allow you to establish an environment where you let your customers’ needs lead the way. Even if there is sufficient demand in your niche, you still have to identify the ideal customer you want to target, how best to talk to them, and how to keep them interested and loyal. 

9. Not Having a Strong Marketing Plan

Continual success in business requires a strong marketing plan. This means not simply tossing out random, scattered marketing campaigns here and there but creating a clear and sequential strategy that you can follow each day for every aspect of your marketing efforts. 

Your plan should be well-rounded enough to cover all bases but be specific enough for you to analyze your returns regularly. This way, you can apply what you’ve learned toward creating even better, more focused marketing campaigns.  

10. Not Securing Your Intellectual Property

Lastly, you also need to secure your intellectual property to protect your original ideas. Otherwise, anyone can copy and lay claim to your or very similar plans. Intellectual property includes trade secrets, patents, trademarks, and copyrights, along with designs, technologies, and much more. 

Ensuring the safety of your proprietary information and unique vision is an absolute must. Be careful who you share it with and make sure all individuals in the know have signed detailed non-disclosure agreements. 

Conclusion

Creating and running a business may carry a lot of unique struggles. But it also carries with it, an immense amount of positive potential. You’ll be compelled and inspired toward personal growth, creative problem solving, more strategic planning, improved communication and collaboration, and healthy risk-taking. 

While mistakes are common, they don’t have to ruin us, and we can avoid some of the biggest business mistakes by learning from those who’ve already walked a similar path. 

Sound Accounts helps business owners like you succeed with individually tailored bookkeeping solutions that improve efficiency, maximize productivity, increase organization, and lower stress. Connect with us today to get started. 

To learn more about avoiding business mistakes, check out our frequently asked questions below. 

FAQ

What are a few common reasons why businesses fail?

Some common reasons why businesses fail include:

• Lack of financing. 
• Not investigating your specific industry or market
• Failing to develop a business plan
• Not attracting good talent or partnerships
• Overspending on the wrong things
• Expanding too quickly or not quickly enough
• Underestimating resource requirements
• Not focusing on marketing and connecting with your audience

Can poorly managed businesses recover?

The short answer is yes, but it takes considerable change. It’s not enough to simply realize that what you’re doing isn’t working. You’ve got to be teachable, which is probably the most difficult thing for people, especially entrepreneurs, who are by nature, highly independent. 

If you remain open to learning, mentorship, guidance, new ideas, refinement, better money management, creative thinking, a lot of adaptation, and a bit of humility, you can turn things around. This will require you to not only refine your business strategy but your own internal mindset and mode of operation as well. 

What are some good places to look for help with my business?

You can find loads of help from a multitude of sources including:

• Mentors
• Business consultants
• Financial professionals
• Other entrepreneurs and managers
• Books on business, investment, management, leadership, and personal development
• Public presentations by noteworthy professionals
• Blogs and other online sources
• Community resources catering to business owners
• Networking groups