One thing is certain, there are many mistakes a small business owner will make along their entrepreneurial journey. However, one of the keys to a sustainable business are minimizing the impact of these mistakes and moving past them as quickly as possible. With that said, let us explore a few of the more common mistakes I have seen business owners make.
Forgetting to Contact an Accountant
Once you have committed to starting a business and have paid for your business license, finding an accountant should be a top priority. Estimated tax payments are due quarterly and an accountant can help you determine the payment amounts and can also advise on which expenses can be used as deductions and which cannot. This can help decrease the amount due to the IRS, state, and city governments. Missing these payment dates can be costly at the end of the year in terms of penalties and interest. Taxes are a part of business and staying ahead of this can eliminate some of the stress of owning a business.[1]
Becoming Complacent
Business owners can quickly become complacent or content with the results of their business. When things are going well, it can be easy to relax and coast but a business does not come with cruise control. There will always be another business trying to take customers and revenue from your business. Creating a plan for the growth of your business is one way to stay proactively engaged in the success of your business. This could be planning sale events, promotional announcements, holidays specials, new product lines, or more. Another way to stay ahead of the curve is by talking to your customers and researching competitors. Each of these groups can provide valuable insight into upcoming trends and changes that you will want to be prepared for. [2]
Inconsistent Marketing
Marketing is the fuel your business needs to grow but it needs to be consistent. What happens if you just water your favorite plant when you feel like it? If you have pets, I am guessing you feed them at pretty much the same times every day. Regarding marketing, a consistent flow of social media posts, emails, or promotional messaging is crucial to keeping your customers engaged and growing your base. Using a calendar or spreadsheet to plan and track marketing efforts can help you with consistency and evaluating results. Some marketing ideas will work better than others, but if you are not tracking the results, it may be challenging to sort them out.[3]
Unsure About Pricing
Pricing doesn’t have to be overly complicated. Researching your competitors or similarly priced products or services can help determine a starting point. Once you have determined your total cost to get your product or service into the hands of your customer, you can then determine the selling price. Just remember, that you do not always need to have the lowest price. Trying to compete as a low-cost provider can severely impact your revenues and can also be perceived as a low-quality provider.
On the other hand, larger corporations can sell similar or identical products at a lower price point. In business, that is called economies of scale. Corporations can buy products or supplies in larger quantities to reduce the per unit price. While there isn’t much a small business can do to compete with big box retailer or service industry pricing, they can improve the customer experience and we will talk more about that next.
If you are an existing business, you may struggle with raising prices. Raising prices due to inflationary issues, such as increased shipping costs, fuel costs, and supplier pricing increases does not have to be the end of the road. Expenses will rise in business, just like they do in our personal lives. Customers are more understanding than we sometimes think. However, the key to maintaining that relationship with your customer is through communication. If you need to raise your prices, make sure you are communicating this with you customer. [4]
Ignoring the Customer Experience
The customer experience is paramount to the success of your business. These are the feelings or emotions a customer may experience when they receive the product they purchased from you. This is particularly important when you sell products online. You want to avoid a customer having buyer’s remorse and wanting to return the item or leaving negative reviews because the packaging or communications were poor. One easy way to accomplish that is it to make them feel good about their purchase and appreciated as a customer. The value perceived by the customer can be enhanced with a personal touch on packaging, shipping, communications, or more. There are low-cost ways to accomplish this. It could be something like a branded shipping box with stickers and hand-written thank you notes that are included with the item they purchased. Opening the package should feel like opening a present, and who doesn’t like opening presents? [5]
Whether we are starting a business or running one, there are so many moving parts that it can be easy to overlook some of the basics. Hopefully some of these suggestions will help you along the way as you continue toward the goals you have set for yourself and your business.
About the Author:
Bryan Shaw, MBA
Bryan is the founder of DigiCom Strategies, a consulting company specializing in e-commerce, business planning, and digital marketing and also the cofounder of Hill Tree Roastery, a small batch single origin coffee roasting company. Utilizing real life experiences as a small business owner, he works with other entrepreneurs to help them start and/or grow their companies.
[1]McKee, M. (2020, August 14). Council post: Why should you have an accountant for your small business? Forbes. https://www.forbes.com/sites/theyec/2020/08/18/why-should-you-have-an-accountant-for-your-small-business/?sh=68c14607444d.
[2]Paul, D. (2020, August 14). Don’t let complacency kill your business. LinkedIn. https://www.linkedin.com/pulse/dont-let-complacency-kill-your-business-david-paul/.
[3]Steckman, M. (2017, April 18). How inconsistent marketing will destroy your business. moneymarketingminute. https://www.moneymarketingminute.com/post/2017/04/18/how-inconsistent-marketing-will-destroy-your-business.
[4]Pricing strategy for your product or service. Marketing MO. (2019, August 24). http://www.marketingmo.com/strategic-planning/how-to-develop-a-pricing-strategy/.
[5]Bordeaux, J. (2021, June 15). What is customer experience? (and why it’s so important). HubSpot Blog. https://blog.hubspot.com/service/what-is-customer-experience.