8 Pitfalls of Managing Your Own Business and How to Overcome Them

What an exciting venture – to start, run, and manage your own business! Maybe you have a talent that you are offering as a service to clients such as massage, consulting, or financial planning. Or maybe your business is selling a product like clothing, wines, or information products. Whatever your plan involves–services or products–managing your own business takes certain skills beyond the specialized knowledge that makes you good at what you do. If you don’t learn the skills of running and managing your business, you may find yourself experiencing some of these common pitfalls. If you do experience them, acknowledge where you are, then take measures to overcome them. Common Pitfalls of Managing Your Own Business: nn1. Not having a business plan and a marketing plan. A business plan is a roadmap for success and a marketing plan is a schematic for every day marketing activities. Many entrepreneurs believe they can get away without a business plan if they’re not seeking outside funding, but business plans are not just for investors. They guide you to where you want to go in your business. If you don’t have a plan, find a business consultant or SCORE counselor to help you write one. You can work with a marketing consultant or SCORE counselor to develop quarterly marketing plans to track what marketing activities give you the greatest results.nn2. Not doing financial projections and monthly reports. Most business owners are only conce ed with how much money is coming in. But that’s only gross profit, and your business success is based on net profit–how much is left after expenses. A major pitfall of business owners is not doing financial projections. You need to chart out for one year what income you expect and your estimated expenses, both fixed and variable. Use an Excel spreadsheet or have your accountant do it in QuickBooks. When they run your monthly profit and loss statement, make sure they explain what the numbers mean. You must know your bottom line each month to manage your business successfully.nn3. Not having enough capital or reserves. Some businesses need an infusion of capital when they start out. You may need to borrow funds for renting your location, purchasing inventory, or outfitting your office. If you were unable to borrow, you might have gotten personal loans or you started on a shoestring. With little capital, you probably don’t have much in reserve. Business advisors suggest having at least six month’s to a year’s worth of expenses in the bank. This pitfall causes the demise of many businesses. Build up your reserves whenever you have any surplus.nn4. Not being knowledgeable in your field or about business. Do you have formal training in your industry? Have you studied how to run a business? Not having enough knowledge, skill, or training in your specialty or in business is a major pitfall. How will you compete against more skilled practitioners? How will you know the best quality products to buy and the best prices? You can open a business and then get more training and education as you go along, because ongoing training will keep your skills sharp and current. And you’ll want to get educated in all the nuances of managing a business from financials, to customer service, to employee relations, and more.nn5. Not checking the competition or staying current with industry trends. You can’t ignore the competition or pretend you don’t have any. It’s not spying, but you must know who your competition is and what they are up to. Can you provide better, faster, or a different service? Can you offer deeper discounts, better quality, or follow-up support? Find out what your competition is doing and offer something more. Read industry jou als and stay current with what is going on in your industry. You have to be the best to stay on top, and it only takes a little time each week to do your homework.nn6. Not tracking, measuring, following up, or following through. How can you know how successful you are if you don’t track your results? Did this marketing campaign attract more visitors to my website? If not, what can I do to improve my results? Learn how to track and measure your business and marketing activities. Also, make sure you follow up and follow through. If you send out postcards and offer a free 30-minute consultation, make sure you provide it to those who respond. If you advertise an open house for client appreciation day, follow through and hold the event. Clients and prospects will lose faith in you if you don’t keep your word.nn7. Poor customer service. Have you heard the expression, the customer is always right? I have some coaching clients who run retail operations and they say that they train their staff to give 110% when it comes to customer service. Satisfied customers provide additional revenue in the form of return business and referrals. However, dissatisfied customers can do a lot of damage by spreading the word about your poor service. See the long-term value of happy customers and do everything in your power to make this a top priority. Without customers, you have no revenue!!!nn8. Burnout from overworking and doing everything yourself. Enthusiastic entrepreneurs wear a big “S” on their chests thinking they are Super Business Owner! I can do everything myself. If I want it done right, I have to do it. That works fine until you find yourself getting about five hours of sleep a night and making errors during the work day. Start looking at what you can delegate and find top quality, affordable contractors or employees to take some of the load off. After all, all work and no play makes for a very unhappy business owner. If you’re so stressed out, how can you enjoy the fruits of your labor?