Here are 9 all-too-common small business mistakes so that you never have to make them yourself... saving you time, money and your sanity.
1. Selling yourself short
When you’re new to business, knowing how to price your products or services can be a minefield. If you under price your expertise, it can be a difficult financial hole to climb out of.
Make sure that your prices are competitive, fair and reasonable and provide you with a decent profit margin. Keep an eye on your competitors in order to gauge the average market rate, and review your pricing model regularly to ensure fair payment for your work.
2. Waiting too long to hire
While you might be a bit of a solo act when you first start out, it’s important to recognise when to start growing your operation. If you’re struggling to meet demand, this could be a great time to experiment with expansion. Whether you hire an employee to help deliver your product or service, or to handle a specific function like administration, taking on an extra pair of hands can be a crucial part of growing a small business.
3. Neglecting your professional network
It might not be at the top of your list, but building your professional network can open the door to heaps of opportunities that you might never have known about. From a friendly ear to shared challenges, to learning new industry tips and tricks, taking the time to get acquainted with your industry peers can be hugely rewarding. When they have more work than they can handle, they might even recommend you to their customers. Try digging about online to see what relevant groups you could join and then get networking.
4. Not having a business bank account
Opening your first business bank account can sometimes feel like a scary step, but it’s an important one. Although not legally essential for a Sole Trader, having separate bank accounts for your business and personal finances is recommended - you can find out more in our business banking guide. As well as keeping all of your business costs in one central place, having a dedicated business bank account can also provide you with a clearer picture of your cashflow. A business bank account can also appear much more professional to customers and suppliers alike.
5. Underestimating the value of marketing
If you’re not marketing, you’re not reaching your business’s full potential. A great first step is to set up a social media account for your business - even just on one platform at first. Check out our guide to inexpensive marketing ideas for your small business for more.
6. Putting your personal life on hold
You’d be hard-pressed to find a small business owner who hasn’t found themselves occasionally, or perhaps not so occasionally, putting work before their personal life. When you’re the driving force behind the success of your business, it can be difficult to take your foot off the gas. A work-life balance can be notoriously tricky to achieve but it’s well worth the effort.
7. Neglecting your professional development
When you have customers paying for your expertise, it might feel like you already have all the skills you need for your business to succeed. However, if you can dedicate some time to learning a new skill or improving an existing one, you might be surprised at how much this could benefit your business.
8. Failing to plan for the long term
Once your business is up and running and you’re achieving your day-to-day objectives, it’s important not to neglect your long-term goals. While capturing these in a formal business plan can be extremely helpful, it’s not essential. As long as you have an idea of where you’d like your business to be in the next 5-10 years, you’ll have something to prepare for and strive towards.
9. Ignoring your accounting responsibilities
Aside from accounting professionals, not many people glean much joy from managing their accounts. But like it or not, keeping your books in good order is essential for any business.
Failing to properly record and submit your finances to HMRC could not only land you with a hefty fine, it could land you in sticky legal territory too. We use FreeAgent with our clients to take care of all of this for you. FreeAgent is a cloud based accountancy system giving you real time information for critical decision making.
Please do not hesitate to contact me if you have any questions. Contact details are on our website.
Steve Pearce MICB PM.Dip
20th June 2023