3 Fatal Mistakes that Small Businesses Make – and How to Avoid Them

As a current or soon-to-be small business owner, you know – or will soon discover – that running a business is challenging yet highly rewarding, personally and professionally.

When gains are realized, the only regret that successful small business owners typically have is that they didn’t take the leap sooner.

Hindsight is a beautiful thing!

Also, half of the businesses fail, i.e., they don’t make it past the 5th anniversary. If that doesn’t put you off, maybe this following statistic will – about a quarter of startups won’t make it to their first birthday party.

Naturally, there are different reasons for small business failure – including factors beyond a business owner’s control (e.g., recessions, changing laws and regulations, a Wal-Mart opening up across the street, and so on).

But surprisingly, there are things that small business owners do that sabotage their own triumph. Of course, these self-inflicted wounds aren’t deliberate. Yet the fact remains that they combine to block, impede, and undermine success – and, sooner or later, survival.

This article focuses on the three fatal mistakes startups and small businesses make – and, even more importantly, how to avoid them.

1. Failing to differentiate.

It goes without saying that competing on price is always essential; even unicorns like Amazon and Google understand this principle.

However, successful organizations seldom focus solely on price, which can be a race to the bottom.

All businesses must ensure that in addition to price value, they establish brand differentiators such as service, support, responsiveness, personal attention, etc. Initially, the lowest price will attract the bargain hunters; however, to retain them as repeat customers, your business needs to prove they understand them and their evolving needs.

Beyond competing on price, some of the ways to differentiate your business from its competition include the following:

• Unique Value Proposition (UVP): Clearly articulate what makes your business different. Identify the fantastic benefits or solutions you offer that customers cannot easily find elsewhere.
• Exceptional Customer Service: Providing excellent customer service can set your business apart. Responding promptly to customer inquiries, addressing concerns, and going the extra mile can create a positive experience that customers remember.
• Innovation: Stay ahead of the curve by introducing new and innovative products, services, or processes. This can help your business stay relevant and attract customers looking for something fresh and different.
• Quality Products/Services: Ensure your products or services are high quality. Consistently delivering superior quality can build customer trust and loyalty, setting your business apart from competitors.
• Branding and Image: Develop a strong brand identity that reflects your values and resonates with your target audience. A well-crafted brand image can create a lasting impression and differentiate your business in the minds of consumers.
• Personalization: Tailor your products or services to meet your customers’ specific needs and preferences. Personalized experiences can create a sense of connection and loyalty.
• Sustainability and Social Responsibility: Embrace environmentally friendly practices and demonstrate social responsibility. Many consumers prefer businesses that are committed to making a positive impact on the environment and society.
• Effective Marketing: Craft compelling marketing messages that highlight your unique selling points. Use creative and targeted marketing strategies to reach your audience and showcase what makes your business unique.
• Partnerships and Collaborations: Form partnerships with other businesses or influencers in your industry. Collaborations can introduce your brand to new audiences and add credibility.
• Employee Engagement: Invest in your employees and create a positive work environment. Engaged and motivated employees can provide better customer service and contribute to your business’s overall success and reputation.
• Convenience and Accessibility: Make accessing your products or services easy for customers. Enhancing convenience can be a crucial differentiator, Whether through an intuitive online platform, convenient locations, or flexible payment options.

2. Not hiring experienced sales professionals.

There’s a reason that good sales professionals are always in demand, especially during recessions.

Unfortunately, many small business owners plan to hire experienced sales professionals when they have the revenue to do so.

Salespeople are integral to growing a customer base and revenue. Therefore, startups and small businesses need top sales professionals to acquire customers, close deals, and develop the brand.

3. Not entirely using the web.

While there are many reasons to love the web, it’s arguable that the biggest benefactors are small business owners. Indeed, in the pre-web days, small businesses had to spend enormous amounts of money to try and get on their target audience’s radar screen. But now, small businesses can get noticed online for a fraction of the cost.

Digital presence

A digital presence starts with a functional, customer-centric website and online and inbound marketing. However, a website is not enough; your business must also use social media and, ideally, SMM, which may include influencer marketing. Email marketing, podcasting, and blogging comprise a comprehensive customer-centric marketing solution.

The Bottom Line

Running a small business is hard work and sacrifices, but the rewards can be significant – and, in many cases, remarkable.

Small business owners who wisely avoid the pitfalls noted above put themselves on track for sustained success, both personally and professionally.