Running a small business is not easy, and most of them end up in failure. Failure is a natural part of being an entrepreneur, however, and most successful entrepreneurs today have had many failures in their past. The goal is to learn from the mistakes of others as much as you can while minimizing the impact of the errors you’re bound to make along the way. Let’s take a look at some of the worst mistakes small business owners make so you won’t have to commit them yourself.
1. Not Getting Insurance and Not Setting Up the Right Business Structure
One of the most important things is protecting yourself from liability from the beginning. This means setting up the right business structure and having the right level of coverage. It would be best to decide whether you’re going to operate as a sole proprietorship, an LLC, or as a corporation. The only time we would suggest that you stay as a sole proprietorship is if you have limited assets and you aren’t exposed to many risks in your line of business. Other than that, you need to get an LLC at least so that your personal and business assets will be separated.
Next, you need to start looking at insurance for small businesses. Your small business insurance should include liability insurance, fault and omission insurance, and business car insurance if you’ll be using a car to conduct business. You’ll also need insurance to cover your premises for accidents, natural disasters, and vandalism, among other things.
2. Not Hiring a Lawyer
Working with a good lawyer is also extremely important if you want to avoid lawsuits in the future. If you’re truly serious about running a business and this isn’t a hobby for you, you shouldn’t start before sitting down with a lawyer and considering keeping one on retainer. You never know what could happen, and having someone you can call for advice or representation whenever you need will come in handy. They’ll also be able to look contracts over for you or draft some for you.
3. Trying to Do Everything Yourself
One of the things many starting business owners don’t understand is that they don’t have to handle everything themselves at the beginning so they can save money. It would help if you leveraged the work of freelancers and contractors too. There’s no point in you handling HR, payroll, IT, and graphic/web design if you can hire someone else. So, look at what you can do comfortably and what you can afford as far as third-party work goes.
4. Having No Knowledge of Marketing and No Plan
You shouldn’t start a business without having at least some marketing knowledge. Yes, you can hire a third-party firm, but they could take advantage of you if you don’t understand what they’re doing. You also want to be able to gauge the impact of campaigns and choose the best option for you. So, do your research on offline and online marketing methods that you can use.
You should avoid these mistakes at all costs if you want to become a successful small business owner eventually. Don’t hesitate to speak with other people who have started their own business and ask them as many questions as you can so you can learn from their experience.
