In the midst of a “jobless recovery”, the lure of entrepreneurship is drawing in more innovators than ever before. It’s a great time to start your own business—but there’s no manual for being an entrepreneurs, and first-time small business owners quickly discover how many pitfalls there are in the competitive, high-stakes environment of small business ownership. If you’re in the running to start your small business, here are some of the most important errors to avoid.
1. Growth without purpose
As a rule, entrepreneurs don’t think small—and while that enthusiasm and ambition can be a great asset, it’s also important to keep your growth grounded and purposeful. Companies that grow too quickly, or without a clear vision of the way forward, quickly overrun budgets as well as management bandwidth. Don’t think of your company’s size as an obstacle to overcome—small companies have an easier time staying agile, upgrading equipment and software, and evolving as market circumstances change.
2. Nurturing blind spots
Experienced entrepreneurs know that it’s okay to be wrong; the sooner you find holes in your business model, the sooner you can patch them up (or, worst case, move on to another idea). At least at first, you should be spending just as much time trying to disprove your ideas as you do trying to sell them to others. When you realize where you were wrong, you can quickly adapt, saving resources and time, and allowing your company to grow into something truly remarkable.
3. Blinging out your office
We live in a culture that wants the biggest, best, and flashiest immediately, and are unwilling to wait; but purchasing all the expensive toys, gadgets, or office space you want will thin your finances and place you in the situation to not have the funds should something truly important arise. As you begin your company, look for second-hand, used, and refurbished products wherever possible. Don’t buy everyone in your company a new iPhone right when they come out; use some LG, Samsung, or HTC phones that are more business oriented, functional, and a whole lot cheaper. Things that aren’t as ‘cool’, but that will still get the job done, are the lifeblood of responsible entrepreneurship.
4. Outsourcing too aggressively
As companies begin to get larger and outgrow their small 4-5 person offices, many begin to think they need to start outsourcing new positions to companies that specialize in different aspects of business. There are some great things you should outsource once your company has the resources, like finding new employees, payroll, or SEO, but there are a lot of things you can save money on and that are more beneficial having in-house. Keep your accountant our accounting team close by and use their knowledge and resources regularly to help you plan your investments. Don’t outsource office management duties, like hiring, firing, receptionists or even janitorial services. Keep costs low and manage those things yourself.
5. Refusing to let go
Just as you know that you don’t always need to be right, you should be willing to see when your plan is so far from being right that you can’t save it without spending unreasonable amounts of time, money, and energy. Again, having your business go under isn’t a bad thing; rather it’s a step in finding the right business and right strategy for you. Remember that you aren’t your business, and having a failed business doesn’t mean that you’re a failure, but that you now know a lot more than you did before. You will know things that will help you succeed next time where you failed this time.
Aimee Watts is a staff writer for Mobile Moo. She has spent ten years telecommuting full-time, and loves spreading tips and advice for fellow work-at-home parents. She loves gadgets, new ideas, and skiing with her two favorite people: her husband and teenage son. They live in Evergreen, Colorado.