1) Not doing market research
Market research is an essential first step to a successful business. Doing market research helps a company to avoid inflated prices and carrying merchandise that no one wants.
2) Not keeping accurate records
Accurate records are necessary to write off purchases, pay your taxes, keep track of inventory, pay your employees the correct amount, etc. If you don’t keep accurate records, you could end up in legal trouble.
3) Getting over your head financially
A huge mistake often made by small businesses is not taking into account the business expenses beyond the start-up costs. Besides the obvious expenses like overhead, the small business owner needs to be prepared for unexpected costs. Making a financial plan is an excellent way to avoid these problems.
4) Not accepting credit cards
5) Not having reliable suppliers
If the majority of what you sell is out of stock, the likelihood of a customer getting annoyed is high and the chance of them returning is low. If your suppliers are very inconsistent, you may end up having to close your business temporarily.
6) Hiring too many employees
Another mistake is to hire a lot of employees before you know how many people you really need. If you hire too many, you may have to let some go before it gets so bad that you aren’t able to afford to pay everyone.
7) Letting employees work alone
When an employee works alone, they tend to have family or friends come by. Sometimes the employee either is talked into stealing or is convinced to look the other way while someone steals. To prevent this, always have at least two employees work together.
8) Hiring the wrong employees
Background checks on prospective employees and checking out all of their references is necessary to discover if the person is trustworthy. A drug test is a good idea too because people with addictions are some of the most desperate thieves.
9) Not having adequate security measures
The cost of employee theft and embezzlement costs billions of dollars a year. Camera monitoring of all exits is usually enough to reduce customer and employee theft. When there is no other choice but to have an employee work alone, video cameras can also serve as an extra set of eyes to help reduce customer theft. Video surveillance can be expensive to install, but at least it is only a one-time expense.
Another security measure to use is making employees responsible for their cash transactions by giving them their own cash till. After the person’s shift is over, have a manager or supervisor do a drawer audit to check the cash against the receipts to see if there is any missing money. Depending on the size of the business, the employees may have to make the deposits. One employee, even a manager, should not do this alone.
10) Not making a business plan
Not making a business plan is problematic not only because the bank will probably want it, but because it outlines a business’s short and long-term goals. Using a software program to make your business plan will make it fast and painless.