Take a look at the U.S. Bureau of Labor Statistics data on the success of small businesses over time, and you’ll immediately see that about 20 percent of small businesses in the United States fail after just two years. That’s a lot of failed businesses.
So, what happens that makes these companies unsuccessful?
Let’s take a look at a few of the most common mistakes and explore how you can avoid them when attempting to grow your own small business.
The Top 5 Mistakes Small Business Owners Make When Growing Their Businesses
1. Spending too much upfront
When it comes time to grow your business, you want to start small. Think big, but start small.
In other words, don’t throw all of your money into one growth endeavor. Rather, try several growth strategies, putting a little bit of money into each. That way, you can see what areas of your business growth plan are succeeding first before you put more money into other attempts that may not be worth it.
2. Being disorganized
As any small business owner knows, being organized is critical to your business’s success. Staying organized is even more important.
As you grow your business, you’re going to have more streams of income, more expenditures, more payouts, more employees, more insurance plans, and … much more. Staying organized in all of these areas means planning ahead, creating the necessary infrastructure, and keeping copious records.
3. Not understanding what need they are attempting to fulfill (and if it’s scalable)
One key to a good business idea is fulfilling a need that your target audience has. This means that you have to understand your target audience in the first place.
Let’s say that you sell children’s clothes, and you primarily sell play clothes — things that are easy to wash and will stand up against dirt, food, and grime. You are successful, and you want to grow your business, so you immediately start selling fancy dress clothes for kids.
Why might this not be a good idea?
Answer: It may not be what your current target audience wants (i.e. They want play clothes for busy kids who get dirty, not fancy dress clothes).
Lesson: Learn what your target audience wants before deciding how you want to grow.
4. Not hiring help
You can’t do everything yourself as you grow your business. Perhaps you were able to do it all when you only had a few customers and a few sales, but as you grow, you need to hire help. Do this sooner rather than later.
5. Being discouraged by mistakes
It is certainly possible that you will attempt to grow your business, and whatever you try will fail. The biggest mistake that a small business owner can make at this point is giving up.
Don’t be discouraged by your mistakes. If you fail, learn from your mistakes, and try again.
Grow Your Small Business
One of the most wonderful things about owning your own business is setting yourself on a path to financial independence. In other words, most small business owners hope to one day be able to make more money while doing less work.
If this is you (and it should be), take this as a sign to take that next step and start growing your business the right way — by avoiding the common mistakes we’ve outlined above.