Top Mistakes Made by New Business Owners — and How to Avoid Them

Running a small business isn’t always easy. And like any new endeavor, you’re likely to make mistakes. Fortunately, there are many people who have made them before you — so you don’t have to. From being disorganized to skipping out on important protections, consider the following to help you avoid bad business decisions.


A Lack of Brand Awareness

 Business recognition is crucial when it comes to bringing in customers. And brand awareness is the most critical component for driving business growth. The more familiarity consumers have with your brand, the more likely they are to purchase goods or services from you. But as a new business owner, this can feel overwhelming. First, know that a solid marketing strategy is one of the most effective methods to get your name out there. This is why it’s highly beneficial to connect with a firm like Glamour Social to ensure you have a team of pros helping you formulate and execute the best approach to build your brand.


Not Having Enough Money

 While not all businesses require a huge chunk of capital, most of us will need a few thousand dollars (at minimum) to get started. It is not uncommon for new business owners to underestimate the amount of cash they need to get things moving. If you find that you need more money than you have, research the many grants and funding opportunities available via government, non-profit organizations, and private funders.


Being Disorganized

 Your organizational skills are worth refining. This applies to all aspects of your business, but especially when it comes to money matters. If you know that organization isn’t your forte, find good financial reporting software early in your business’s life. Online tools for accounting not only help you keep up with current cash flow but they give you the ability to track and compare business fluctuations over time. This valuable information assists with accurate sales forecasting that’s used for better ordering and inventory management, as well as employee scheduling.


Hiring Friends and Family

Olivia Pawlowski, a contributor for business loan provider OnDeck, notes that there are pros and cons to hiring friends and family. As a startup, the people around you can serve as support, but it's more difficult to set boundaries with people with whom you have an existing relationship. Unless you absolutely have no other options, hire someone from outside of your inner circle. This will ensure that you are established as the boss, and a true employee will be less likely to try and take advantage of you.


Failing to Implement a Business Structure

 Your business structure should be something you establish early on. Doing so can put legal protections in place that can reduce your liability in case you’re taken to court. For many small businesses, forming a limited liability company (LLC) is a smart decision. Depending on what you do and your purpose, you might also incorporate it as a nonprofit. If you decide to register LLC in Illinois, consider working with a formation service to help expedite the process.


Being Impatient

 Patience is one of your most valuable assets when you run a business. And if 2020 taught us anything, it’s that being patient has rewards. Not rushing things along will have a positive effect on your work culture and can help you implement a long-term business model. Plus, you’ll be a better boss and will likely make fewer mistakes throughout your career.


Skipping Insurance

 You already know that you need workers’ compensation insurance, but if you aren’t also investing in commercial auto, professional liability, and other types of business-specific insurance, you are doing yourself a disservice. Insureon points out that most states require businesses to have more than just the bare minimum. Making sure that your insurance matches your potential needs can save you from a financial disaster if something goes wrong.


Running a business means learning as you go. But there are some lessons that can cost you more than others. If you are still looking for information about mistakes that you can avoid, don’t be shy about reaching out for a mentor. Your local Chamber of Commerce may be able to help you find a seasoned professional or consulting service to help you help your business thrive.


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About the Author:

Amy Collet is the creator of, a website that helps professionals and entrepreneurs build and strengthen their personal brand.

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