Success in business is 50% planning, 40% skill and 10% luck.
Picture a business as if it was a credit score. You want to keep it in good shape, which requires planning, diligence and hard work. Business owners need to prepare 100% for what could happen — from failure to success, and even legal troubles.
Yet, many small business owners and entrepreneurs hit a snag somewhere. In fact, Small Business Administration data shows that roughly half of small businesses fail in the first five years.
When you’re a rookie business owner, you’re even more likely to make some of these mistakes that can tank your business. The five listed below serve as great warnings for small business owners and can help you make sure you’re not neglecting a major part of your business just because you’re in new waters.
Mistake #1: Poor Branding
The digital world can speak volumes for the importance of quality branding. A business must portray itself in a way that’s memorable and serviceable for its target audience.
The company must also run its branding materials smoothly across all different sales channels and visible pages. With expert corporate identity planning, a business’s ads can convert well — and their content and social media pages will connect better too.
Mistake #2: Ignoring Your Digital Opportunities
While many small businesses are focused on operating locally, that doesn’t mean you can neglect digital strategies for attracting customers. There are plenty of new tools to give business owners more sales channels to access, build true one-on-one customer relationships, improve internal communications and better their security.
Search engine optimization (SEO) and search engine marketing (SEM) are the most obvious opportunities for your business to make a mark. Think like your customer — what would a client be searching for to find your business? For restaurants, bars and other service businesses, creating pages that reflect your brand but also help you rank for “[your city/neighborhood] korean food” are good ways to target customers looking for businesses like yours. And owning some search engine advertising around those terms can be beneficial as well.
Beyond applications and software, many businesses turn to digital staff in the early years. It’s less difficult than a part-time team and still gets the job done. Sites like Fiverr, PeoplePerHour and Upwork make this possible.
Mistake #3: Inefficient Competitor Analysis
Before you even get into business, you should do a competitor analysis to make sure there’s opportunity in your area — a hole your business can fill. But that doesn’t mean that once you launch, you can stop worrying about the competition. Here are a few ways to keep yourself up to speed.
Analyze the backlinks for their website. This can be done with a backlink checker like Moz’s Open Site Explorer. Just enter the website URL of a top company — competitor or otherwise — and see which sites link to them. Review the context to get a deeper understanding on how these businesses shape their marketing campaigns.
Keep your ear to the ground. Whether your business is digital or a bricks-and-mortar shop, keeping in touch with your suppliers, vendors, accountant, customers and even banker can clue you into new competitors that are emerging in your space.
Mistake #4: Holding Personal Liability
If there’s a lawsuit against the business, what happens to the owner? A worst-case scenario is asset seizure or liens, which could mean the owner loses their home, vehicle and all other assets. That’s not as big of a concern for business owners who incorporate themselves though.
Normally there are no legal repercussions for the owner when an enterprise structures itself as a legal liability company (LLC). The incorporation process is easy, so don’t hold out any longer.
Mistake #5: Not Building Business Credit
Too many small business owners fail to learn how to build business credit. It’s a mistake that comes from the belief that business owners are stuck putting up personal liability anyway.
Truthfully, it’s possible to get business loans without anyone putting their personal credit score at risk. The key is to build a solid credit history with the primary bureaus for business credit reports — that’s Dun and Bradstreet (D&B), Experian and Equifax. (You can check your personal and business credit profiles for free on Nav.com.)
Ready to see your credit data and start building better business credit? Check Your Personal and Business Credit For Free (No Credit Card Required).