10 Mistakes to Avoid When Starting a Small Business

While we all make mistakes, in small business, there are a variety of mistakes that are common. Learning from other people's mistakes can enable you to avoid many of them. These are 10 mistakes that you should work to avoid when starting a small business:

1. Not Doing Market Research - When selecting a small business to start, it is vital to research the industry and the current market for the products or services to be offered. Search online, research at your local library and talk with your local small business organizations to put together a full market research report to evaluate the opportunity for this business to become successful.

2. Choose a Strong Personal Match - When starting a small business, evaluate accurately what your personal strengths are. For example, don't go into selling insurance if you have never worked in that industry before.

3. Lack of Capital - The top reason for small business failure is not failure to plan or choosing the wrong business concept, but is lack of capital. Research will help you to determine the amount of capital to have on hand as well as the reserve money that should be kept in the event of an expansion opportunity or an emergency.

4. Lack of a Business Plan - In addition to lack of capital, the next most common reason for business failure is lack of a business plan. Spend time to write out a business plan for not only the short term, but the long term. Work through 3 months, 6 months, 1 year, 2 years, 5 years and 10 year plans. While the plans will change over time, establishing and writing a detailed plan of action out will make it much more likely that you will accomplish those goals for your small business.

5. Ask for Help - Many professionals view asking for help as a sign of weakness. But, successful individuals in business recognize that asking for help is actually a sign of help. Don't wait until something becomes a challenge for your business, as at this point, it is likely too late to make the necessary corrective actions. Surround yourself with experienced professionals not only during the start up phase of your business, but ongoing to act as a support system. You never know what you will need help with or when you will need it.

6. Lack of Revenue - Many small business owners go into business as they have a specific skill, talent or interest. And, they will generally not fail due to those things. But, they fail due to lack of revenue. Spend a significant portion of every day working to build new customers by marketing your products and services.

7. Setting Prices Incorrectly - If your prices are not right, your products and services will not sell to the levels that you are expecting. Be sure to spend time researching the current market for pricing when setting yours. And, if things are not working smoothly in the early stages, be sure to re-evaluate so that you can make changes as needed.

8. Lack of a Budget - While no one really likes the word 'budget', in small business, it is vital to its survival. Track income and expenses regularly and make necessary adjustments as necessary to enable your cash flow to always remain positive.

9. Poor Record Keeping - Many small business owners excel in certain areas of their business, however, it is not uncommon for business owners to be challenged in the areas of administrative duties, including keeping accurate records.

10. Growing Too Quickly - In small business, it is important to grow organically instead of forcing growth as this can cause challenges in cash flow.