Wouldn’t it be great to wave a magic wand and mistake proof your business? Well unfortunately, it’s not that easy. Mistakes are par for the course, and every entrepreneur encounters them. The good news is you can learn so much and become savvier in the process. Make no mistake, there’s a learning curve involved for even the most seasoned entrepreneurs. From Warren Buffet to Russell Simmons or Barbara Corcoran to Jay Z, the road to success usually encounters mishaps along the way. Although the list is long, there are a few mistakes that stand out above the rest. Take a look at these three common pitfalls and be ready to guard against them on your journey to success.
They operate as sole proprietors.
According to a recent study by the SBA, there are roughly 28 million small businesses in the United States and 60% of them operate as sole proprietorships. Sole proprietorships are business entities owned and operated by one person and are by far, the most popular business structure. They’re easy to set up, very inexpensive and require little formality. These advantages however do come with risks. As a sole proprietor, the law makes no distinction between you and your business. Therefore, you are personally liable for what happens in your business. Your personal assets become vulnerable to lawsuits, debt collections and employee mishaps that may occur. Be prudent. Collaborate with your lawyer and accounting professional to determine which legal structure will protect you and your business. Remember, one of the most common pitfalls in business is using the wrong structure.
They don’t know their market.
In business, not knowing your market is like not knowing your name. It’s extremely basic and is the cornerstone for everything you do. Budding entrepreneurs often seek to service everyone, but studies show being too general and vague will only lead to frustration and failure. When determining your target market, identify the demographic data that distinguishes them. How old are they? Where do they live? How much do they earn? Are they male or female? Most importantly, know what they need and how your product or service benefits them. Knowing this basic information helps you market effectively and serve the needs of your consumer in a profitable way.
They wear too many hats.
I bet you where so many hats you need 5 heads to fit them. You’re the receptionist, bookkeeper, marketing adviser and social media manager. You do it all and your plate is always full. Well, you already know “a jack of all trades is a master of none.” It’s just impossible to be efficient in every aspect of your business. One of the best decisions you can make is delegating some of those responsibilities to other qualified individuals. If your budget is small, hire part-time or contract help. By just removing one thing off your plate, you could free up much needed mental energy to focus on something else. Remember, spending all your time working in the business, leaves little time and energy to work on your business.
Adjusting, tweaking and learning on the fly are all a part of the journey. Don’t be intimidated by it. Learn as you go and remember to avoid these three common mistakes: operating as a sole proprietor, not knowing your market and wearing multiple hats.
Teri Nichole Harrison is an attorney, success strategist and start-up consultant for out of the box entrepreneurs. She is the CEO & founder of Fearless & Fabulous Worldwide, a personal development and business consulting company in Nashville, Tennessee. Teri is also the founding attorney of the Tennessee Business Law Center and the author of Winning at Entrepreneurship: Innovative Strategies for Small Business Success. For daily empowerment and business insight, follow Teri on twitter: @_teriharrison and visit her website: www.ffworldwide.com.