Back to list April 26, 2018 Small-Business Mistakes to Avoid Small businesses are one of the success stories of Cumberland County, Pennsylvania, and this country. Small companies and entrepreneurs create jobs, make a big impact on the economy and create real demand for related and support services. Sometimes, great things really do come in small packages! While creating a small company can give you incredible freedom and allows you to pursue a passion or your own dream, entrepreneurs also take a risk. Due to their size, smaller businesses often operate on a small budget, and this can make them vulnerable. When vulnerability is compounded by the common small-business mistakes new owners sometimes make, the very survival of a company can hang in the balance. To give your entrepreneurial ambition the best chance at success, avoid these small-business mistakes: Overestimating Your Abilities: The biggest mistake our business development team sees in aspiring entrepreneurs is that they don’t realize they need help putting together a business plan. If you have even the slightest hesitancy when it comes to designing your strategy — or if you have no business management experience at all — it’s always best to hire someone to help with those aspects of how to run your company. You can even get help for free at a Small Business Development Center (SBDC), like the one at Shippensburg University. Having Unrealistic Goals: Some entrepreneurs read about overnight success stories and imagine they, too, can be an instant hit. In reality, some of the most successful companies in the state started slow and grew gradually. By not inflating your expectations at the start, you’re less likely to overspend and more likely to persist in the face of obstacles, giving you a better chance of success. Creating Your Business in a Bubble: One of the biggest business blunders is letting an exciting idea get away from you. If you have a terrific idea, it’s still important to test it, conduct market research and check out the competition. Who is your audience? Who are your competitors and what you can offer that they can’t? What systems do you need to test to make your project profitable as quickly as possible? Keep in mind your company will fit in somewhere in a network of potential customers and competition, and you need to be able to position yourself effectively in this mosaic by understanding and knowing both your customer base and the businesses you are competing against. Choosing the Wrong Team and Supports: No business is in a vacuum, and you will likely need employees for your venture. Even if you are a solopreneur, you will need support services or assistants to help with some parts of your enterprise. Choose wisely, since the wrong team members can be an inefficient and costly error. Not Understanding Pricing: There’s always a cheaper version of any product or service out there, and competing on price point is not a winning game. Pricing your offerings incorrectly can mean you succeed with customers but still end up failing because you can’t cover all your costs effectively and bring in the profit you need. Keep in mind your pricing needs to cover your marketing, labor, employees, extra services, real estate, time off and more. Get help from professionals if you’re not sure you’re getting this right. Overspending Out of the Gate: Most companies need to spend money to make money, but it can be easy to overleverage a small or new venture. By getting too many loans with considerable interest rates, you may be so far in the red you may be pushing the possibility of a profit back. Deciding whether you want to bootstrap, seek investors or find other forms of funding is an important place to start. Also, don’t overlook incentive programs, grants and government incentives that can help you finance your project with less risk when compared with using personal assets or applying for larger personal loans. Cumberland Area Economic Development Corporation (CAEDC) can provide the link between your investment and traditional bank financing. Contact us to find out more. There are many small-business mistakes to avoid, and Cumberland Area Economic Development Corporation (CAEDC) wants to help your enterprise avoid them. Contact us to find out more about our services and business resources.