Owning a business is no easy feat. Are you doing everything you can to ensure your success? Here are the top 5 costly mistakes we commonly see small business owners make.

1) Rushing, without Planning

A lot of the time we see business owners come up with new ideas or get too excited with expanding that they forget to plan the basics that can determine success from failure. Before you invest thousands on a new venture, keep in mind the basics that will help push your business forward.

Basics that should not be omitted include some of the following:

Market Research -Understanding your target audience and the surrounding factors that can affect them will help you pivot your business to stand the harsh competition you will face. This can be a lengthy process and researching real-time data could give you a competitive outlook.
Budgeting -Everyone starts from somewhere and sometimes you don’t need a lot of capital to get started. However, having a budget and allocating funds to absolute necessities will allow you to spend strategically and prepare you for success.
Business Plan -The basics to your business should be planned out and determined prior to launch or expansion. Sometimes a business plan is even required when pursuing 3rd party funding.
Legal Compliance -Having a business legally compliant is a no brainer. However, there may be simple things you’ve never thought of that could cost you thousands in the future. Example: Remember to be ADA compliant at both your physical location (handicap parking, handicap rails in restrooms…etc.) and your online website (option for alternative text, captions on videos...etc.).

2) Trying to DIY Everything

As a business owner, you likely have talents unmatched by others. The entrepreneurship within you is a unique skill to have. You probably are capable of doing a lot of things by yourself. However, the DIY mentally will quickly stunt your growth.

To have a well-functioning and blossoming company, you need to allow it to have room to grow. If you do a lot of everything, you’re restricting your company’s growth to the abilities of one single person. There’s only so much one can do before reaching burnout.

Yes, you’d like to save money. However, hiring the right contractors and professional services are an investment to contribute to the success and growth of your company. Finding the right help early on will prevent issues down the line and allow you to grow with better ease.

3) Not Pricing Properly

Starting a new business or expanding to other locations brings up the question of what the best pricing would be.

Undercharging will create a loss of potential profits and overcharging will lose clientele. Finding the sweet spot with how to price is a difficult but necessary step to take.

Here are a couple tips to help you nail the right price:

Check out multiple competitor pricing strategies. You can do this while performing market research (which will help with other things listed above.) Getting an idea about why others price the way they do and why that makes sense for their quality/service offered will help you reach an idea of how your company will stand next to the competition. You may or may not be similar and if you’re not in the same pricing, what makes you different? Why?
Dive into the numbers. A little budgeting goes a long way. If you need help, get in contact with a professional such as an accountant. Detailing the costs it will take to provide your product or service will be important. You must determine how much you need to charge to at least break even. Many fixed and variable costs exit. Fixed costs are things that will not change month to month such as your rent expense. Variable cost are things that could change month to month such as the shipping costs and materials purchased.

4) Not Utilizing Contracts

Early on, you may forget to think of this but contracts will help every party involved in an agreement. We are no attorney’s or legal professionals, but contracts are important tools that prevent problems down the line.

Word of mouth can only go so far. Writing agreements in person and having both parties sign will protect everyone who is involved.

Consider utilizing contracts for employees, outside contractors, vendors, and investors. Never sign without reading the entire document and always have open communication between yourself and whomever you work with.

5) Not Tracking Expenses

Tracking expenses is major when starting or expanding a small business.

Having exceptional discipline doing this will save you headache down the line. However, we recommend (as noted previously) to not spread yourself too thin. Leave this to a professional and find a bookkeeper that will fit your needs early on. This will help you when you file your taxes and to gain insight periodically for business decision making.

Whether your company is at a loss or gained profit at the end of the year, you will benefit tremendously from having the expenses tracked and financials ready. Not only will this save you tax headaches and potential audit nightmares, but you have the data needed to plan your business decisions with the proper data. Budgeting and trimming unnecessary spendings will help your growth and management.

Whether you’re new in business or seriously expanding, it’s best to consider these top mistakes, to save you money and prevent costly mistakes we commonly whiteness.

Need help? Contact us today and speak to a professional.