Approximately half of new businesses survive five years or more and about one-third last 10 years or more, according to information from the U.S Small Business Administration. With longevity comes stability, but first your small business must make it through the early milestones. How can you start your small business off on the right foot and maintain growth throughout every stage?
Avoiding these four small business mistakes is a good start, as is enrolling in small business insurance with the right level of coverage for your present and future needs. CoverHound makes it easy for business leaders to compare policies to find the right protection for their organization at the right price point.
Mistake #1: Mixing Personal and Business Finances
Establishing an efficient banking system that separates personal finances from business finances will make life easier for everyone, especially when tax season rolls around. Entrepreneur has a few tips for keeping your finances on solid ground. First you will have to establish your business as a limited liability company (LLC) or an S Corp and establish a business checking account that’s separate from your personal bank accounts. Throughout the year, use a business credit card and keep receipts carefully itemized by function. These measures will make it easier to file taxes, and easier to provide proof if your business faces an IRS audit.
Mistake #2: Refusing to Delegate
One person simply can’t do it all. Delegating may be the best way to bolster efficiency. How can you hand off tasks to others without worrying? It’s all about who you trust and how you follow up, according to Forbes. Make sure your expectations are crystal clear and be sure to set a concrete date of completion so your delegated tasks are not floating indefinitely. Give your employees ample credit for taking some of your workload, and continue to foster an environment of accountability.
Mistake #3: Hiring Likeminded Individuals Only
Your business needs the right team in place to thrive. As author and entrepreneur Bill Aulet says, “Choosing who to hire and work with in a startup is like playing basketball in the schoolyard; you can pick your friends and play for them, but if you want to be good and continue to be on the court, you have to carefully pick your team.” Hire carefully based on each job role, and make sure to include a healthy variety of skillsets and personalities.
Mistake #4: Underestimating the Power of Word-of-Mouth Marketing
If a tree falls in a forest and nobody is around to hear it, does it make a sound? If you provide an incredible product or service and nobody knows it exists, does it matter? Social media and paid search channels are a great start, but nothing beats word-of-mouth advertising from people in your community. Statistics from Nielsen tell us that 92 percent of consumers rely on recommendations from friends and family over other advertising.
Every stage of growth provides a prime opportunity to gauge your progress, and to make sure that you’re not making any classic small business mistakes that may hold you back in the long run. Find the right protection for you and your employees by comparing business insurance policies through CoverHound today!