During the holiday shopping season I’m reminded of the small businesses that are competing for eyeballs and foot traffic. This blog post was written as part of a sponsored program for State Farm®. All views expressed are entirely my own.
My first experience with entrepreneurship was at the age of 18. I had signed up to become a sales rep for a company that made home goods. I remember purchasing inventory and selling it to anyone that would listen to my sales pitch. The freedom I experienced from that short stint fueled my desire to continue pursuing my entrepreneurial dreams.
Today, my husband and I are small business owners doing something we both love. The journey wasn’t always easy, and mistakes were made along the way. But the benefits have outweighed the hurdles we faced. If you’re thinking about launching a small business, or you just started your entrepreneurial journey, check out these five business mistakes you’ll want to avoid.
1. Not having a business plan
Whether you’re starting a new business, or thinking about it, creating a business plan should be at the top of your to-do list. A business plan will help you implement a strategy to get your business through the growing pains, and will also help project revenue and market trends. You will need to create a plan if you want to obtain a business loan or grant. As your business continues to grow, your business plan will help you in the decision-making process and prepare you for the milestones ahead. If you’re not sure how to create a business plan, check out the SBA website for more information.
2. Not preparing for growth
When I launched my translation service business several years ago, I failed to set up a proper legal business structure. When I sought out a government contract that would help boost revenue, I found out that I needed my business structure to be incorporated. In other words, it needed to be set up as a corporation or an LLC. I was so focused on generating an income that I wound up neglecting this important detail. When the translation business started to grow, I had no plan in place and I became overwhelmed. Looking back I wish I had done things differently and set up my business for growth. Think beyond the initial 3-6 month launching period, and prepare ahead for fluctuations in the market. Being a step ahead is crucial if you want your business to experience growth.
3. Trying to do it all
As a small business owner, you’ll be tempted to take on various roles in order to maintain control and/or save money. Neither one is worth the potential negative outcome – not only could you become overwhelmed, you could potentially hinder the growth of your business. Consider outsourcing tasks that you struggle with, and instead focus on your strengths. It will help your business run a lot smoother, and prevent you from getting burned out in the process.
4. Failing to separate personal and business transactions
Failing to separate personal and business transactions is a common mistake entrepreneurs make. In order to keep financial records organized, open a separate bank account for conducting business exchanges. At the end of the year, you will have easy access to a detailed financial record of all of your business transactions. I find that this step alone makes our tax filings go a lot smoother.
5. Not protecting your business
Your business is your livelihood, and one disastrous event could quickly destroy what you’ve worked hard to build. A business owner policy is not limited to a brick and mortar business. Even if you own an Etsy shop and work from home, you need to have coverage. Your homeowner’s insurance will likely not cover your business property primarily used for your business in the event that it’s damaged or stolen. It will also not cover you for business liabilities. What if someone gets hurt while visiting your business or alleges injury caused by the product you sell? You have options, and the coverage will depend on your individual business needs. A State Farm agent can help you determine the right coverage for your small business.
Owning a small business can be challenging, and extremely rewarding. This upcoming Saturday, I encourage you to shop small and help support small businesses in your local community. Help put money back into your local economy while also helping to support the businesses that keep your town vibrant.
This blog post was written as part of a sponsored program for State Farm.