BUSINESS ALCHEMIST: '48 big mistakes' small business owners make (but can avoid)

Dennis Zink
·3 min read
Dennis Zink
Dennis Zink

Some of the biggest mistakes made by small business owners include: Taking on too many roles and responsibilities (35%); not taking enough time off (26%); not separating work and personal life (20%); and micromanaging (14%). The survey by the Alternative Board (TAB), a peer group advisory board, reveals what business owners would do differently, if they could do it all again.

If they could turn back time, respondents would devote more hours to strategic planning (27%); sales (20%); marketing/advertising/PR (18%); and hiring and training employees (11%).

And they would spend more money on marketing/advertising/PR (20%); hiring and training employees (18%); sales (17%); and strategic planning (15%)

Over the years I have received numerous suggestions and selected "48 big mistakes" that, hopefully, you won’t repeat.

  • Starting a business using debt instead of cash.

  • Underestimating the time, money and effort necessary to succeed with a new initiative.

  • Not understanding the power of social media and its ability to attract business.

  • Thinking they can do it all on their own.

  • Not budgeting adequately for marketing.

  • Failure to recognize and thank employees.

  • Not updating or promoting their website.

  • Not building a solid buyer persona.

  • Not having a well thought out and semi-annually reviewed business plan.

  • Running out of cash.

  • Not understanding what your customers want.

  • They don’t surround themselves with smart, talented people who can manage areas that they cannot, and then delegate to them.

  • Placing too much emphasis on customer acquisition and not enough on customer retention.

  • Hiring too many people too soon.

  • Failure to budget for unexpected costs.

  • Getting distracted with the small stuff.

  • Not using a lawyer when setting up the business.

  • Not pivoting your business model when what you are currently doing stops working.

  • Assuming customers will come to you because you offer a great product or service.

  • Underestimating how much capital it will take to make your vision a reality.

  • Not understanding cash flow.

  • Expanding too fast.

  • Failing to identify and hire the best employees.

  • Spending money on advertising without getting a good return.

  • Holding on to poor-performing staff.

  • Not getting feedback from customers.

  • Failing to conduct due diligence.

  • Investing in social media before considering SEO (Search Engine Optimization).

  • Spending time and energy working in the business, instead of on the business.

  • Expecting everything to go as planned.

  • Believing customers will automatically know about the business.

  • Not paying attention to data security.

  • Thinking cheaper is a guaranteed way to beat competitors.

  • Failing to network to drive referrals.

  • Not investing in growth.

  • Failing to step back and analyze results.

  • Not having a specific and measurable sales strategy.

  • Not paying attention to the competition.

  • Failing to pay taxes throughout the year.

  • Taking profits out of the business too quickly.

  • Hiring the wrong team can quickly lead a new business into a downward spiral.

  • Failing to protect a company’s unique knowledge and “secret sauce” in the face of employee turnover.

  • Failing to spend time and money selecting software that does what is needed.

  • Failing to properly train new hires.

  • Giving up more equity than necessary to advisers and potential partners.

  • Getting into business with a friend.

  • Not creating a strong shareholder agreement. Avoid 50-50 agreements with the potential for stalemate in case of disagreements.

Perhaps the biggest mistake may be … drumroll please ... failure to read my weekly column.

I hope you can benefit by avoiding these mistakes.

Dennis Zink is an Exit Strategist, business analyst and consultant, a Certified Value Builder and SCORE mentor, and past chapter chair of SCORE Manasota. Dennis created and hosts “Been There, Done That! with Dennis Zink,” a nationally syndicated business podcast series and “SCORE Business TV” available at Time4Exit.com. Dennis led a SCORE team to create the Exit Strategy Canvas and Exit Strategy Roadmap program that provides a real world methodology for business equity realization. Email him at dennis@Time4Exit.com.

This article originally appeared on Sarasota Herald-Tribune: DENNIS ZINK: '48 big mistakes' small business can avoid