Twenty-seven ways you can mess up in small business means 27 ways you can learn something and do better the next time. You don't build success on success alone; you build success on one failure after another —if you learn from those failures and move forward. What can you learn from these real-life business mistakes? Here are the first nine.
1. Depending on a single source
Scott Newman, president of Massachusetts-based US Markerboard, was depending largely on a single manufacturer for his product. When the manufacturer took on another distributor and wasn't able to meet US Markerboard's product needs, Newman found himself scrambling to find manufacturers, compare products and prices, and fill his orders in the middle of his busiest time of the year.
Lesson Learned: Don't place your business success in the hands of a single manufacturer, distributor or other source.
2. Not developing supplier relationships soon enough
Newman regrets not beginning to develop supplier relationships long before his need arose, which would have given him the time to do research, compare prices, negotiate terms, and schedule his orders in time to get them delivered when he needed them.
Lesson Learned: Even if you do not currently need additional supply sources, you should be looking and comparing long before you do. Developing solid relationships takes time, and you don't want to be forced to settle for what's available when the time comes.
3. Missing the obvious
Sometimes the thing that will make your business a success is so obvious you miss it. That's what happened to Kirk Ward, a retired accountant who wasted time and money on various Internet marketing ideas, none of them successful, before realizing his business was sitting in a box, in the form of all the marketing materials he had created over the course of his accounting career. Ward turned them into a collection of articles, tools, and online classes for accountants—Secrets of Marketing Accounting Services—and started selling what he already knew.
Lesson Learned: The newest, biggest, brightest, shiniest product or idea doesn't necessarily become the best business venture. Much of your value as a future business success is in what you already know. Dig into your own experience and expertise first.
4. Assuming that a professional product will solve all your problems
Ward's initial success with his marketing-for-accountants website hit a major speed bump when he decided to trade in his "cheaply made custom software" for a professional, packaged, pricier software. Ward's customers started complaining, and Ward found himself losing the business he'd built up and unable to get help from the professional customer service team attached to the software.
Lesson Learned: Don't assume that a professional name, image, or package guarantees a professional performance or a professional, helpful support team. Do your research before you invest in pricier options, get real feedback from real people, and then make your choice based on what you find from that research.
5. Staying with something that's not working
For small business owners of all stripes, making a big investment in some sort of professional solution, product innovation, or outsourced help can be a real boon. But if it isn't, and the investment isn't worth the return, many small business owners tend to stay with the investment for too long.
Lesson Learned: If you spend money on something that turns out to be a flop, realize it quickly and let it go as fast as you can. You may not be able to recover that investment, but the more time you waste on trying to make something worthless into something worthwhile, the more money you lose in profitability and growth.
6. Not checking your URL
Since the Internet is so undeniably a part of commerce, grabbing a business URL and setting up a business website is (or should be) an assumed part of any business marketing plan. URLs can come with a history, however, and not always a good one. In the case of Derrith Lambka, CEO of how-to website MarketingZone.com, his URL came with a blacklist notation. The company that owned the URL before Lambka had gotten blacklisted by Google; it took petitioning to be recognized as a new company, with a significant delay in building website traffic, before MarketingZone.com was cleared and able to start growing.
Lesson Learned: Do your homework on URL purchases before you invest hundreds or thousands of dollars. A formerly blacklisted URL doesn't mean you can't clear it and use it, but far better to know about the problem and start solving it from Day One.
7. Not developing a cohesive marketing plan
Even experts can miss important business steps. Leslie Truex, author of The Work-At-Home Success Bible, cites her own failure to develop a marketing plan that was more than "a hodgepodge of tactics that I'd throw together when business dropped."
Lesson Learned: Lack of a marketing plan means you'll be scrambling to come up with some method when business gets tight. To succeed, you need to be marketing consistently, building relationships, developing a cohesive brand and image, and laying the foundation for a business that keeps growing from the first day onward.
8. Not marketing on a daily basis
Truex shares that, "it's easier to maintain a steady stream of business if I include marketing in my daily business activities." Many small business owners make the mistake of marketing only in case of emergency: we're out of funds, we're out of customers, we lost a client, we need cash now. Haphazard marketing will yield only haphazard results.
Lesson Learned: Market your business daily. Even 10 or 20 minutes every day, consistently spent on a good marketing strategy, will build a steady stream of relationships, referrals and business growth.
9. Assuming that others will do the right thing
While trust is an important part of business relationships, you shouldn't assume that your employees are trustworthy just because you are. Cyndi Finkle was running a successful catering business for television crews when three of her own employees overheard her say that she had no competition. They promptly, and secretly, formed their own business and began contacting Finkle's clients while still working for Finkle's company. "Since I do the right thing, I always believed that others would do the right thing," says Finkle. "But I learned that not all people have the same work or moral ethic—and that, when given the opportunity, others will lie and steal and cheat."
Lesson Learned: Paranoia won't serve you well, but awareness of the simple truth that greed is a powerful motivation is important. Finkle, now running Art Works studio and classroom, as well as her catering business, puts it this way: "in order to protect yourself, you need to be more careful and less trustworthy—especially of people you do not know directly."
Annie Mueller is a freelance writer based in St. Louis. She covers small business topics with a focus on lean/zero budget start-ups, business blogging, and simple (sane) ways business can use social media without selling their souls to Facebook. Her work can be seen online at Investopedia's Financial Edge blog, Young Entrepreneur, Wise Bread, Organic Authority, Modern Mom, and her own site, AnnieMueller.com. Find her on Twitter: @AnnieMueller.