The 10 Mistakes Small Businesses Make and How to Avoid ThemSep 12, 2023
Hey, it's AJ Schneider, the Money Mom, here to drop some truth bombs on the common pitfalls that many small businesses fall into. Buckle up because we're about to dive into the 10 mistakes I've seen too many entrepreneurs make – and more importantly, how you can steer clear of them.
Mistake 1: Neglecting Personal Budgeting
It all starts with you. If you don't have a solid personal budget, how can you expect your business finances to be in order? Know what you need to cover your personal bills, save for your goals, and tackle that personal debt.
Mistake 2: Mixing Personal and Business Finances
Drawing a clear line between personal and business finances is crucial. Mixing the two can lead to confusion, legal issues, and financial chaos.
Mistake 3: The "Write-Off" Frenzy
Not everything is a write-off. Keep meticulous records of your business expenses, and don't fall into the trap of labeling everything as a deduction. It can come back to haunt you during tax season.
Mistake 4: Neglecting Client Acquisition
Marketing and product development are important, but don't forget the golden rule: "More clients mean more business." Focus on growing your client base alongside your products.
Mistake 5: Blind Investments
Investing in your business is essential, but make sure you understand the financial cost and the time it takes to recoup that investment. Avoid pouring money into areas that won't yield a return.
Mistake 6: Looking Like vs. Acting Like a Business
Appearances matter, but they shouldn't overshadow action. Don't get so caught up in looking like a business that you forget to act like one.
Mistake 7: Premature Hiring
It's great to have help, but hiring assistants or social media managers when you can barely cover your bills isn't sustainable. Make sure your business can support these expenses.
Mistake 8: Emotional Attachment to Your Business
Your business is not your identity. Don't take setbacks personally, and don't let emotional attachments hinder your ability to sell effectively.
Mistake 9: Building Before Selling
Setting up an LLC, website, and investing time and money is fantastic, but it's all pointless if you haven't made a sale. Prioritize revenue generation.
Mistake 10: Using Personal Savings as a Piggy Bank
Your personal savings should be off-limits for your business. Relying on it can put both your personal and business finances at risk.
It's clear that neglecting your business finances can be a recipe for disaster. Taking your finances seriously is non-negotiable if you want your business to thrive. So, dodge these common mistakes, stay financially savvy, and watch your small business grow into something incredible.
Remember, I'm here to help you along the way. If you're ready to take control of your business finances and unleash your full potential, reach out to me, AJ Schneider, the Money Mom. Together, we'll create a path to financial success for your business.
Beyond The Basics: Our Glossary Of Financial Terms
We define the lingo you'll need to become a finance expert!
We hate SPAM. We will never sell your information, for any reason.