Being a small business owner can be gratifying. Owners get to be their own bosses, choose their own hours, and turn their passions into a career. A perk of owning a small business is getting to make every decision about your company- what to spend money on, how to market, where to establish your office, and how to budget. This massive list of decisions may be exciting for freshly minted entrepreneurs, but it can also come with consequences. Screw up your cash flow or misunderstand your target customers, and you could put yourself in a bind. Owners should educate themselves on some of the most common pitfalls that others make when running their own company. Entrepreneurs need to have a plan of action for every aspect of their business. A single blind spot could make you one of the 50 percent of businesses that don’t succeed.
Never Developing a Target Audience
Owners should educate themselves on some of the most common pitfalls that others make when running their own company. Entrepreneurs need to have a plan of action for every aspect of their business. A single blind spot could make you one of the 50 percent of businesses that don’t succeed.
Entrepreneurs need to do the research necessary to help them understand who their target audience is. Identifying a target customer is critical to your marketing strategy, including the demographics you want to reach with your advertisements. HVAC companies, for example, should be focusing their marketing efforts on homeowners within a certain radius of their business. Alternatively, if you own a yoga studio, your target audience may be women between the ages of 25 and 60. It can get much more specific, but pinpointing the profile of your target customers is the best way to find them—and to help them find you.
Failing to Take Stock of the Competitive Landscape
Every small business is entering a landscape filled with competitors offering similar products and services. When looking for an HVAC professional, a plumber, or a contractor, almost everyone will have several to choose from. As the owner of your business, it’s your job to understand that competitive landscape and define what your edge is. This is often referred to as product differentiation. What’s going to make your company stand out from the half-dozen others in your country offering a similar service? You can distinguish your business through competitive pricing, excellent word-of-mouth, winning customer service, or lightning-fast responsiveness. You’re going to want to either offer something that none of your competitors have or be the very best at a specific aspect of your service.
Not Building a Professional Website
It’s 2019, and customers find service businesses online. In fact, a 2017 survey conducted by Burke found that 87 percent of respondents used a search engine to look for local services over the course of the previous month. If we take that data as a starting point, then it’s fair to say that around nine-tenths of your prospective customers are going to look for you through Google, Bing, or another search engine. Will they be able to find you? When they do, will they be impressed with what they see? A big part of the answers to those questions has to do with your website.
Accessible, detailed, and professional-looking websites will rank higher in searches. They’ll also lead to higher conversion rates once prospects actually land on the site. Small business owners that skimp on their website, or overlook it entirely, are creating a serious problem for themselves. You need to be smart and selective with your budget. Cutting costs on your digital shingle and the first impression is not the place to do it.
Underestimating the Importance of Cash Flow
As a small business owner in the early stages of heading a company, it can be tempting to focus on promising metrics like website traffic, phone calls, and future sales. But your overhead expenses don’t wait for conversions. Every month they’re not offset by a steady cash flow that puts you a month deeper in the red. Small businesses should work to establish consistent cash flow early on. Even if the revenue sources aren’t as exciting as some of the other sales prospects out there. Prospects don’t pay the bills, and small businesses get sunk all the time by too many weeks of building debt.
Skipping Out on Incentives
When they first enter the market, small businesses face a towering task in trying to gain some level of traction. Visibility amid a competitive landscape rife with more established companies can be daunting. They can’t expect the quality or uniqueness of their product or service to seize the spotlight right away. Part of the problem is that small businesses rely on online reviews now more than ever. Some small business startups don’t have any can, unfortunately, represent a red flag for potential customers.
The way to overcome this frustrating hurdle is by offering major incentives to your first customers. (and thus get them to write your first reviews). A new HVAC company might consider a 50 percent off promotion on all installation and repair work. Plumbers just getting their business off the ground could offer free pipework inspections on a specific date. These attractive offers are going to get local residents and homeowners interested in your company. It’s important to remember that a lot of small service businesses don’t have a brick-and-mortar office location and they can’t attract attention from drivers or passersby. They have to bootstrap their way into the mix, and advertising attractive promotions is a tried-and-true way to do it.
Not Learning About Relevant Technology
While many small businesses may start on a strict budget, that doesn’t mean owners shouldn’t educate themselves on the software, hardware, and other technologies. For service businesses, that could mean a field service management (FSM) platform, or a customer relationship manager (CRM). Small business owners don’t need to make substantial investments right away. They can start by simply exploring what software platforms might work best for their operation. Entrepreneurs should also consider subscription models for cloud-based programs that won’t eat up their funds upfront. You might not use business software right away, but just by surveying what’s out there, you’re exposing yourself to technology that could advance your business further.
WHERK is a brand-new software platform designed and developed specifically for small businesses that are service-oriented. Whether you’re an HVAC company, a plumbing outfit, or a small team of professional landscapers, WHERK was created with you in mind. The platform’s stack of functionalities includes fleet and personnel tracking, automatic payments, dashboard reporting, and a built-in customer relationship manager. We encourage you to explore the WHERK website to learn more.