No doubt, starting your own business can be challenging. Opening your doors requires financial support, timing, and a big leap of faith. Luckily, more small businesses are surviving their first year. According to the Bureau of Labor Statistics (BLS), over 30% of all new businesses started between 1995 and 2010 closed before their second year. More recent BLS data found 80% of businesses opened between 2016 and 2017 survived their first year.
This bodes well for entrepreneurs who are eager to open their own businesses, but not all businesses will make it through a year. Those who don’t provide some hard-learned lessons to those motivated to try their hand at opening a business. With this in mind, what are some of the most common mistakes entrepreneurs make in their first year? Below five of the most common, and how you can ensure your own business survives the pivotal first year.
Mistake #1: Thinking you can do everything yourself
When your business is young and you only have a handful of clients and projects, it can be easy to take everything on without extra help. However, as the business grows, your client list will get longer and projects will take up more time. Eventually, other tasks, such as administrative work or brand marketing efforts, will start to fall to the wayside.
Many entrepreneurs may think they need to do everything themselves, from finalizing projects to accounting. Yet the more you can delegate tasks, the less you’ll feel overstretched. Plus, delegating means you can focus on what you do best: your work.
Hiring employees to ease the workload can make a difference and is a significant milestone. But they can increase your financial and managerial responsibilities. Luckily, there are short-term solutions if you’re unable to hire someone right now.
Time management is all business owners can master. To start, creating a detailed schedule can help you practice those skills. Even tracking your time on an excel sheet can help you determine how long you’re spending on each task and where you need to cut back.
Although hiring an employee might be too big of a goal, you can turn to temp workers or contractors. They can help you organize your paperwork, answer phones or emails, post on social media, or perform other administrative tasks. There will still be some paperwork to fill out, but finding the right temporary employee might help you get everything sorted while you find a more permanent solution.
Mistake #2: Ignoring the small wins
The world of entrepreneurship and startups is fast-paced. You’re often focused on goals like landing your first big client and getting your first investor. However, small wins happen between those big ones that deserve recognition and celebration as well.
Researchers Teresa Amabile and Steve Kramer explain, breaking down big goals into smaller portions “reduces fear, clarifies direction, and increases the probability of early successful outcomes.” Big goals can be overwhelming or unattainable. Not achieving them can feel disheartening. Small goals, however, can help provide direction and can keep you motivated as you complete them.
As a business owner, you can break down some of your bigger goals into smaller, more achievable ones. As you complete these more manageable mini-goals, you will start to notice advancements on your larger goals. Eventually, you’ll feel as if some of those lofty dreams aren’t too far off. Plus, you can help build a more positive culture for your company, as you take the time to appreciate small, daily wins.
Mistake #3: Taking too much advice
As you grow your business, you’ll also inevitably grow your network. You’ll meet other entrepreneurs in your field or city who have fantastic advice. You may even have a pile of books by the likes of Steve Jobs, Jeff Bezos, Ariana Huffington, or other successful entrepreneurs. This guidance might be welcoming and helpful in some cases, but there is such a thing as too much advice.
Eventually, you’ll have to start picking and choosing what advice best applies to your work and your methods. Additionally, you should still lean into your gut instincts before you take the opinions of others as gospel. If you take in too much outside direction, you’ll start second-guessing your decisions and may lead yourself to failure.
That doesn’t mean you shouldn’t appreciate advice when it’s given, but you should always approach it with an open and analytical mind. Ask yourself: Does the advice negate something I feel positive about? Or does it fit well with my current methods, and may lead me to more efficiency?
Mistake #4: Not doing thorough market research
Marketing plays a major role in business success. Whether it’s an e-commerce business, a brick-and-mortar retail shop, a personal brand, or a B2B consulting firm, marketing can make or break your company.
So when it comes to doing market research, keep in mind there is never a cap on the amount of research you can perform. There are always new things to discover about your customers, new audiences to find, and new behaviors to observe. Any effort you put into marketing (when done right) will only increase traffic to your site and improve your online presence.
Even if your business is mostly online, you can do local research and invest in local marketing efforts on social media. If your business is your personal brand, you can find ways to monetize your posts and increase your online reach through social ads. Investing in marketing efforts and different forms of marketing (such as content marketing, SEO, social media, email campaigns, etc.) can help your business grow and retain loyal customers.
Mistake #5: Fearing failure and having a fixed mindset
As mentioned, you will hear a lot of advice from fellow entrepreneurs as you grow your business. And not all advice will be helpful for you, and you should lean into your gut when you’re unsure. However, there is also a fine balance you need to strike between being confident and being overconfident.
Confidence is when you feel your idea is right and are willing to see it through to completion. Overconfidence is when you’re so self-assured, you ignore the possibility that you might be wrong. This can also be known as a fixed mindset. As a result, overconfidence, or being fixed in your ways, can easily lead to failure. A growth mindset, on the other hand, means you’re willing to learn from your mistakes and improve your craft by taking in new information.
It’s important to remember that even with all your experience and knowledge, you’re still human. You’re going to make mistakes, and you’re going to fail from time to time. Hopefully, those small failures won’t be enough to close your business but will provide you with plenty of learning opportunities. Don’t shy away from being proven wrong, but do expect that you maybe don’t know everything there is to know about your industry, product, customers, and business.
Through hard work, strategy, and advice from those around you, you can find success despite potential setbacks. Learning from the failures of other entrepreneurs can help your business stay successful. But at the same time, be grateful for those lessons. Remember, there are lessons to be learned in your failures, too.
About the author: Prior to joining the TSheets by QuickBooks marketing team, Katie McBeth spent her time writing for various blogs across the web, including Quiet Revolution, Fortune Magazine, and many more. Her degree in anthropology helped her establish a strong foundation for researching and empathizing with the many fascinating people she interacts with. When she’s not writing, she’s hanging out with her small private zoo of three cats, two dogs, and dozens of plants.