When it comes to starting your own business there’s no rule book, no cheat sheet. There’s seldom a clear-cut path to success laid out ahead of you. Basically, when you’re opening your own business, you’re bound to make some mistakes along the way but you don’t have to make every mistake in the book just to learn from the experience.
To help save you the heartache of making the same mistakes that many other business owners have made before you read up on these five common mistakes small business owners make.
Dropping the Ball When It Comes to Public Liability Insurance
There are so many different types of insurance these days that it sometimes feels like you’re about to be asked to get insurance on your insurance, however, public liability insurance is important and serves a purpose. Public liability insurance covers your business in the case that another person (aka. a third party) injures themselves or damages their property on your premises or as a result of your product, services or due to something related to your business. This insurance will protect you in the event that you find yourself being sued for negligence.
How much cover you actually need depends on the location of your business and the type of services you provide. A common consideration is whether your business is located within a shopping center. If your space is within a shopping center, then you may be required to take out public liability cover up to a certain amount in order to keep leasing your premises. That being said, no matter where your business is located or what you do, it’s worth taking out public liability insurance to protect yourself from time-consuming and expensive litigation. You can check out NRMA Public Liability Insurance to learn more about the specifics of their policy.
Trying to Go It Alone
There is absolutely no glory to be gained from going it alone when you don’t have to. In the digital age, we’re more connected than ever before and you’re likely to have a contact in the business community you can reach out to for advice. This sort of tried and true advice from those who have come before you and have already ventured into the brave world of business ownership can stop you from making costly mistakes. So, don’t do it alone! Ask for help – no one will think any lesser of you.
Going Too Big, Too Soon
Starting your own business can be an exciting time. You’ve taken the leap and you’re finally putting your dreams into practice. It is easy to get carried away, put the cart before the horse and go too big too soon. What does this look like? Business cards on the first day, going all-in on flashy office space, an expensive launch party planned before you’ve even budgeted for month two, three or four.
There’s plenty of specific advice on exactly how much you should be spending as a small-business owner but the gist of the matter is that you should be spending within your means. What does that mean in actual terms? Thirty per cent, basically, to keep yourself out of the red, your expenses should never exceed more than thirty per cent of your total revenue as a business. However, to compare a normal year as a small business owner to being a small business owner in 2020 is like comparing a papercut to a bullet wound. To read more about how you should be specifically tailoring your business expenditures in this uniquely crazy year, check out this article.
Not Saving for a Rainy Day
If this year has taught us anything it’s to expect the unexpected. For this reason, we should be saving for a rainy day, creating an emergency fund so that if you’re forced to close suddenly or drastically alter your business practices then you’ve got a buffer, a safety net that can help you from having to take the unfortunate step of laying off employees or closing down entirely.
As JFK said, we should never be afraid to negotiate. People are never going to give you a better deal on a product or service if they don’t know you’re looking for it or if you’re too afraid to ask. Especially in 2020, vendors and landlords have made a name for themselves as being particularly understanding of the situation small business owners find themselves in. You’d be in a decent position to negotiate prices on rent, telecom services, technical services, vendors or wholesalers. Remember to always go about things respectfully and explain your situation clearly and concisely in a way that elicits empathy. Gear up for negotiations with these tactics for business negotiations.