Owning a small business is a dream for many, but like any dream, the realities are often overlooked. When it comes time to turning the key and opening the door, we can let ourselves get whisked away into that fantasy world where the line around the corner is unceasing, and profits roll in like thunder over the Nebraskan plains. Unfortunately, reality is less forgiving than the world in which our imaginations roam. Instead of falling into the same ill-fated patterns as the small business owners before you who failed, learn from this list of mistakes many make, that you should not.
1. Budget Money for Living Expenses
Whether or not your business takes off over night (it won’t) or takes years to get going, the fact of the matter is you will still need money for your day to day life – food, housing, clothing, etc – and using profits from the business to support your life will not happen immediately. When starting up your small business, be sure to set up an account and budget for your living expenses. Don’t let the daily need to eat ruin your business!
2. Be Realistic in the Planning Phase
You may want to trick yourself – or your spouse – into thinking your idea is so fool-proof, that a certain goal will be easily attainable. If you let your fantasy world brain do the planning – for example, that clients will be lining up in no time, or that there will be immediate word of mouth as you go viral in your community – then you are in for a big let down. The more realistic you are with yourself and with modest goals, the more likely you are to be able to achieve these goals. Let the devil’s advocate voice in your head – or better yet, trusted friend or family member – ask you the hard questions and answer them truthfully.
3. A Model is Essential
Some think that an actual business model is a waste of time; how often are you going to back to this wrinkly document you labored over years ago? Think of the Constitution of the US – we go back to that thing all the time! A well-thought out business model is absolutely essential; it wouldn’t hurt to have it looked at by professionals, either.
4. Outsource Some Tasks
A small business can’t afford to have a large staff, so one thought is to wear as many hats as you can, including janitor and office manager. While that’s a noble gesture, it’s even more noble to not wear yourself too thin and to actually give your business a chance to survive. Realistically tackle the parts of the business that you know you can own, but if you need someone to run your social media, or keep the office clean, let go of those reigns and let someone else do it. Sure it’ll cost some money, but the peace of mind you earn will be well worth it.
5. Know you’re Going To be Working Hard
Yes – the ultimate goal is to be sipping daiquiris in the Bahamas while your underlings run the business back at home. But if you think that icy cocktail is coming to your hands and lips soon, think again. You have many long weeks ahead of you. But if you know that that’s an important part of the business, you won’t be surprised. Prepare for long hours for very little money – at least at first. We all want something for nothing and to get to our end goals as soon as possible. However, a little realistic patience will be your path to actually getting that umbrella-decorated drink.
6. Allow for Success and Growth
If you run a small business, you can get to a certain level of success. If you run a large business, you could be an actual millionaire. No matter what your business is, or what your goals are, be open to allow the business to become bigger than you initially ever hoped. Maybe all you ever wanted was to open a hamburger stand – maybe that’s all Ronald McDonald wanted. If you want to actually make some money and run a successful business, you have to know when to expand to new markets. Not too soon, but don’t wait too long, either.