Running your own small business is no easy task.
There are many critical business mistakes you may fall victim to surrounding your budget, marketing, competition, human resources, and everything else under the sun. If you stay proactive instead of being reactive and educate yourself to build your business acumen, you can avoid committing these fatal mistakes.
It can seem like an overwhelming challenge, but there are ways to make it easier. Often, the best strategy to overcome a problem is to avoid placing yourself in that position in the first place.
That’s the power of being proactive instead of reactive.
Here are some of the best practices to keep your business from making critical mistakes:
- Understand business and tax law
- Hire a motivated team
- Know that every purchase counts
Let’s explore these a little more!
1. Understand Business and Tax Law
There are many business mistakes under this category, including, but not limited to:
- Not filing the right tax forms when hiring freelancers
- Not reporting your earnings to the IRS appropriately
- Choosing the wrong business structure
- Not complying with FTC regulations for affiliate links
- Ignoring standard and mandated employment practices
And much more!
One of the first things you might notice when you start your business is that there are a lot of laws to comply with.
The process of not only understanding these laws but also making sure they are being followed is what gets many companies into trouble early on.
You can get sued over this!
Understanding business law will help you avoid issues that arise with wages, employment law attorneys report.
Some of the most common problems involve the laws regarding overtime, paid vacation days and time and a half. If you don’t have full-time employees in your business, then you should verse yourself in the risks of outsourcing to freelancers.
I highly recommend that you consciously work with your accountant (consult one if you don’t have one) to ensure that everyone’s wages are being calculated correctly and paid on time.
My virtual CFO has been invaluable to my business as is a local attorney I hired to help me form a single-member LLC when the time came for that. Even local bank representatives to help you separate your business finances from your personal are important to listen to.
Whenever taxes and the law are concerned, I always ask for help!
And, you should, too 🙂
That’s how I avoid the majority of these critical business mistakes in advance.
2. Hire a Motivated Team
Who you choose to bring in to work with your company is one of the most important decisions you’ll encounter as a business owner.
Some of the big business mistakes in this section include:
- Undercompensating your team
- Failing to properly communicate with them
- Hiring contractors when you need employees
- Creating a negative work culture
- Promising work you can’t afford to ask for
Your contractors and employees are the ones who are going to be in charge of overseeing various parts of the company on a daily basis.
Naturally, the hiring process must always be taken seriously.
As someone that’s hired contractors for my business and helped other successful 6-figure and 7-figure bloggers outsource, I know this firsthand.
Obviously, you want to employ people who will do the job well, but the type of employee you bring on can also determine how fast your company grows within its first few years.
Every client interaction matters, and when employees aren’t as motivated as you are, it doesn’t matter how great your business model is. With poor service, your company will suffer long-term.
That’s why I love to follow this simple, 10-step process when I want to outsource:
- Identify where I’m spending more time than I should
- Determine if I should outsource the task to maximize my ROI and opportunity cost
- Consider the benefits of an employee vs. a contractor and what my expectations and description for the position would be
- Begin to recruit in various Facebook groups and through job boards, as needed
- Instruct all potential candidates follow instructions
- Weed out those who cannot comply with your instructions
- Have them upload a video to gauge their personality before spending time interviewing
- Assign them a test project to assess their competencies
- Ask for references on the candidates that perform well
- Interview the final candidates if needed and make a decision
Let me know in the comments below if you have any questions about this process!
I find that it helps me avoid making critical business mistakes by thinking about how I want to proceed before acting.
3. Know That Every Purchase Counts
A common mistake made by new business owners is not taking the time to truly connect with the people they are selling to.
Some others include:
- Marketing to customers on a product they’ve already purchased
- Serving the wrong content to a niche audience
- Not emailing the subscribers you’ve collected
- Not thanking your audience for their purchases
- Being disingenuous or inauthentic
One of the ways that I do this is by sending long, personal emails that are around 500+ words long. I spare no details and my audience really gets a feel for what my life is like, which helps them empathize.
Empathy can be leveraged for sales when you need it to be.
Understandably, small business owners are extremely busy, but you won’t be in business for long if you neglect your customers.
Customer contact will also help you grow your network. In business, it’s not who you know, but who knows you.
So, how can you show your customers that they are valued?
A great demonstration of your appreciation is to simply handwrite a thank you note to them.
You might think that this is too small a gesture. After all, what does a big client want with a note? The fact is that these small gestures are exactly what larger, more established companies want to see.
They appreciate a business person who is both passionate about their product and the customer experience.
If you take the time to connect your audience and always approach from a standpoint of generosity, you will succeed.
Conclusion
You’re going to make some mistakes throughout your business journey.
It’s inevitable.
What you can do is prepare to deflect some of the more serious ones that could cause your business to shut down. Remember the tips listed here and you can help your business to succeed and avoid critical mistakes.
In this article, we discussed these main strategies:
- Understanding business and tax law
- Hiring a motivated team
- Knowing that every purchase counts
Do you need help getting your business off the ground?
Feel free to hire me as your business coach today!
Let me know if you have any questions in the comments below.
Cheers to future success!
