4 Small Business Start-Up Pitfalls to Avoid

Starting a small business is an exciting time. However, it’s also a time when there are many potential pitfalls that can trip you up if you’re not careful. Here are four of the most common start-up mistakes that you need to avoid if you want your business to be a success.

1. Not Doing Your Research

One of the most common mistakes that new small business owners make is not doing their research. They might have a great product or service, but they haven’t taken the time to understand their target market or what the competition is offering. As a result, their business fails to gain traction and quickly fizzles out. Before you launch your small business, make sure you have a solid understanding of who your target market is and what they’re looking for. conducting market research and creating a detailed business plan will help ensure your start-up’s success.

A business plan is always a helpful way to ensure you test our your business model – on paper.

To create a business plan, you can use the Business Plan Builder Tool to put it all together, step by step. Alternatively, you can follow the below steps to quickly put together a plan that won’t leave out any components – ensuring you are properly prepared for your business.

Simple steps to creating a business plan:

1. Define your business: What will you be selling or offering?
2. Understand your market: Who will want to buy what you’re selling?
3. Develop a marketing plan: How will you reach your target market?
4. Create a financial plan: What are your start-up costs and how will you generate revenue?

For a more in-depth business plan, be sure to use the tool mentioned above – the Business Plan Builder Tool.

2. Not Having Enough Capital

Another common mistake that new small business owners make is not having enough capital on hand to sustain them through the early stages of their business. A lack of working capital can cause all sorts of problems, from being unable to pay your vendor invoices on time to be unable to take advantage of opportunities as they arise.

Make sure you have enough money in the bank to cover at least six months’ worth of operating expenses before you launch your small business. That way, you’ll have some cushion in case things don’t go as planned during those early days and weeks.

If you don’t have the needed capital, accessing government funding is always an option to help you cover those initial startup and operating expenses. 

Government funding can come in the form of government grants, government loans, and tax options; all of which can help you cover expenses that your business may have, including; hiring, training, equipment purchase, marketing costs, rent, utilities, and more.

To see all government funding options, be sure to use the Funding Database which currently has over 1,500 funding options from all agencies across Canada.

3. Hiring Friends and Family

Hiring friends and family is another common mistake among small business start-ups. While it might seem like a good idea at first (after all, who knows your company better than the people who are closest to you?), it can often lead to problems down the road. When things aren’t going well, it can be difficult to maintain a professional relationship with someone who is also your friend or family member. If possible, try to avoid hiring friends and family members during those early days of your small business startup journey. Instead, focus on building a strong team of professionals who share your vision for the company.

4. Trying to Do Everything Yourself

As the saying goes, “If you want something done right, you have to do it yourself.” However, that isn’t always true when it comes to running a successful small business. Trying to do everything yourself is one of the quickest ways to overwhelm yourself—and ultimately lead your start-up down the path to failure. Instead of trying to wear all the hats in your business, delegate tasks and responsibilities to employees, contractors, and vendors whenever possible. Freeing up your time will allow you to focus on other important aspects of running a successful small business startup journey.

Starting a small business is an exciting time filled with many potential pitfalls. By avoiding these four common mistakes—not doing your research, not having enough capital, hiring friends and family members, and trying to do everything yourself—you’ll put yourself in a much stronger position for long-term success.