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Top 4 Mistakes Small Business Owners Make

December 2, 2020

Top 4 Mistakes Small Business Owners Make

What are the common mistakes small business owners make?

  1. Doing Everything by Yourself
  2. Neglecting Bookkeeping
  3. Overspending
  4. Relying on a Verbal Agreement

Being a small business owner is not easy. More so if you don’t have a team as managing can be difficult. But you probably started it because you have a goal in mind. To help you out with your business journey, we have listed the common mistakes small business owners make below. Keep these in mind to avoid running into problems and mishaps along the way. Read on!

Doing Everything By Yourself

A man packing orders

If you’re starting your business, you’re likely trying to do everything by yourself. Maybe it’s because you’re trying to save money by not hiring other people. Or maybe because you don’t want to trust other people on doing important jobs. 

Entrepreneurs are not experts on all aspects of a business. They know what their strengths are, focus on that, and rely on other people for things that they cannot do. Multitasking will only lead to mistakes that could have been prevented if you asked for help.

Get used to the idea of delegating tasks. Start small by hiring. As time goes by you will learn how to select good people. 

Neglecting Bookkeeping

If you’re operating a startup, it may be tempting to procrastinate on accounting and save for later. Deep inside, you probably know that it would just lead to problems later on. Doing bookkeeping consistently can help you run your business better.

It will help you set a budget by knowing your biggest expenses, prepare the taxes you have to submit to the government, monitor your sales and growth, and prevent financial fraud. All of these can lead to better decision-making when it comes to business plans and paths you want to explore.

As a business owner, you should know some basic concepts about accounting. You may hire a bookkeeper for this job, but learning about it can help you better monitor the finances. It will also help you stay on top of your accounting. 

Overspending 

Computing expenses

Bigger office spaces, the newest computers, or a state-of-the-art coffee machine can be so tempting to purchase for your business. But do you need them? If you want to limit your expenses, you should learn how to prioritize the necessities and leave the optional upgrades for later. Don’t worry about it! You can buy it if your business grows to where you want it to be.

Along the side, you also have to take note of your debts. Loans may help you start a business, but be sure to make plans so you can save enough money to pay it back. If you can avoid having debts, that’s better! Be resourceful and only buy what you need and what will help your company grow and profit.

Relying On Verbal Agreements

When running a business, you have to learn not to expect too much out of verbal agreements. If you put your hopes on word of mouth, you may make plans but only find out that you have to cancel it all.

Make it a habit to follow up with a written agreement. Talk about all the details, put them on paper, and have both parties sign it. After all that paperwork, you can have peace of mind about your plans. 

Key Takeaway

If you are planning to start a business or already own one, it is a good idea to know the mistakes small business owners make. Hopefully, after reading this blog you will be able to avoid them and improve! Remember to rely on other people, be consistent about bookkeeping, budget your expenses, and always keep a written agreement.

If you have any questions or inquiries you can send a message here. For more information about handling finances and entrepreneurship, you can read more of our blogs!