There’s no denying that running a business gives you plenty of freedoms and benefits over working as an employee for another company. You are the boss, and you ultimately steer the direction of your business into one that you feel is the best option for your brand.
Moreover, as the owner of a sole proprietorship business, you have total control over whom you hire, what you sell, and where you run your business.
The majority of sole proprietors launch and grow their businesses without any real problems. However, others might make some common mistakes that may even cost them their livelihood in extreme examples!
If you’re about to launch a sole proprietorship or have recently done so, you want to make sure that you steer your business in the right direction. With that in mind, here are some examples of what not to do with your sole proprietorship.
1. Not Having A Business Plan
A business plan isn’t just a document that you create before you start your business. It’s something you should always refer to at various milestones and alter when necessary.
Business plans help you to stay focused on your brand’s financial future by working towards achieving set or agreed objectives. If you haven’t got a business plan, the good news is that you can easily create one right now.
2. Not Using Technology To Lower Tax Liabilities
Let’s face it: nobody likes to pay any taxes if they can help it! The sad truth is that many sole proprietors pay more taxes than required because they aren’t using technology to help them keep track of their sales and expenses.
For example, if a sole proprietor uses Xero as their bookkeeping software, they could export Xero data to Excel to use for specific reporting on sales and expenses.
3. Trying To Do Everything Yourself
Are you an entrepreneur that feels like they must have total control over all aspects of their business? If the answer is yes, it’s time to take a step back and delegate specific tasks or routines to third parties.
One example might be to pay a marketing company to create engaging content for your e-commerce website’s product descriptions. Another might be to hire a graphic designer to create promotional flyers and brochures.
4. Not Asking For Help
Everyone will need a little help with their businesses at some stage, and you shouldn’t feel embarrassed about asking for assistance when you need it.
The last thing you want to do is attempt everything yourself only to discover that you’ve made some catastrophic errors.
When you’re not sure about something, ask someone knowledgeable on the subject for help. That way, you’ll know the answer if the same question or query comes up again in the future.
5. Not Prioritizing Marketing
Some sole proprietors make the mistake of following the old saying, “build it, and they will come.” The truth is, you won’t have many customers (or even none at all) if they don’t know your brand exists! That’s why it pays to make marketing a top priority.
If you feel overwhelmed by the choice of marketing options out there, it’s worth discussing your business and what you want to achieve with a seasoned marketing company. They can advise you of the best course of action for your marketing needs.
6. Not Understanding Your Target Market
You undoubtedly have some excellent products and services that you want to offer people. But, do you know who is most likely to purchase from you? If the answer is no, you need to determine your target audience.
There are a few ways to achieve that goal. For example, you could investigate the target markets of your top competitors.
Another idea might be to have some focus groups use your products and services, and you’ll then determine which people are most interested in what you sell.
7. Forgetting To Ask For Feedback
What do your customers think about the range of products and services provided? What do they think about how you treat them during and after the sales process? Would your customers buy from you again or avoid you like the plague?
You can only be sure of the answers to such questions by asking those customers for feedback. There are several ways you can do that, such as:
- Online surveys;
- Follow-up phone calls and emails;
- Written questionnaires provided with products.
8. Not Using An Accountant
Are you good at keeping and organizing records of all financial transactions in your business? Is it easy to report on sales and expenses at any given time? Do you file all paperwork in a logical and easy-to-follow way?
If you’ve answered “no” to any of those questions, you should probably enlist the services of your friendly local accountant. They can take care of your record-keeping and filing requirements, plus they will help you lower your tax liabilities.
9. Starting On A Shoestring Budget
Some businesses don’t need much money to launch, such as those where only a computer and an Internet connection are the only startup requirements. However, most startup businesses require some launch capital to sell their products and services.
If you don’t have enough available capital to launch your business, delay your launch until you’ve got the money. Don’t start with a shoestring budget because you will stall your startup’s growth and even doom it to failure in some cases!
10. Wasting Money
The simple formula for running any healthy business, irrespective of what it sells, is to make more money than it spends. Unfortunately, some entrepreneurs don’t grasp such a concept and spend their business income on extravagant purchases.
Always keep a tight grip on your business expenses. Look at what you buy, determine if you can lower those costs, and always conduct periodic purchasing reviews to ensure you get the best deals.
11. Not Having A Backup Plan
What happens if things don’t work out with your new venture? For example, what if your business doesn’t sell the volume of products and services you forecasted or anticipated?
It’s always a good idea to have a backup plan for such situations. One thing you could do is have a part-time job and run your startup alongside it. That way, you’ve got a stable income to cover your personal expenses until your business becomes consistently profitable.
12. Letting Low Self-Esteem Win
There isn’t anyone on the planet that can claim that all decisions they make in their professional lives are successful.
Some people make catastrophic mistakes, but what separates the good entrepreneurs from the bad ones is admitting when they’ve done something wrong and recognizing the reasons to avoid such outcomes from happening again.
The thing is, some people will tell themselves they will make mistakes before they even have the potential to happen! Don’t let low self-esteem doom your business to failure.
13. Hiring The Wrong People
When you hire people to work for you, it will put a smile on your face because, as a sole proprietor, it shows you that your business is growing! Just make sure that you hire the right individuals to help your business continue to grow.
14. Over-Promising And Under-Delivering
You must be realistic about what you can achieve for your customers. Don’t over-promise and under-deliver because those customers will not be happy and most likely spread the word that your business is unreliable.
15. Failing To Maintain A Work-Life Balance
Lastly, don’t devote every waking hour to your sole proprietorship. You must strike a happy medium by creating a work-life balance that works well for you and keeps you and your team safe.
The last thing you want to do is annoy your family and isolate yourself from those that love and care for you.