Episode 146: 8 Mistakes All Business Owners Make & How To Avoid Them!

Running your own business isn’t easy. We all make mistakes. It’s part of the process and one of the best ways to learn! But there are a few mistakes that every business owner makes that are easily avoidable. We’ll tell you 8 mistakes and how you can avoid them. This will help you grow your business quicker and with less missteps.

Roger: Welcome to Local SEO Today. I’m Roger Murphy.

John: And I’m John Vuong.

Roger: We wanna welcome you today to our podcast and you as a business owner and an entrepreneur, maybe starting your business brand new. John, we wanna talk to people about mistakes and we’ll talk about 8 mistakes today that we see and we have seen new business owners make.

John: Yeah. I think it’s definitely a challenge out there because when you’re brand new, you really—there’s so much going on, right? And it’s inevitable that you’re gonna make mistakes and ,you know, what are you to do. You try to minimize them and get better and improve, right? But these are probably our top 8 that we could think of. The first one I wanna talk about is really just not valuing or properly valuing your product or service.

Roger: Pricing

John: Pricing, yeah. So, how do you know what’s out there? Are you doing a comparative analysis? Do you know exactly who your major competitors are and what they’re offering for that price?

Roger: And then part of that scenario is you have to internally look at what are, what’s in cost for me everyday to be open for business. If you have a breaking motor store, you’ve got your rent per day, your insurance per day, your staffing cost per day, your cost of goods if you have that, or if your service pays business. What about my leases, what about for my equipment, what about my (people) tools, people, insurance. What you wanna do is this, granularly break it down today, to say okay, my breakeven everyday I need this much in sales, and a lot of new business owners don’t do that. They think well all revenues good but in fact, you need to make sure you’ve got margins in them.

John: And also if you’re brand new, what you’re charging should be at the same level as someone that’s been doing it for “X” amount of years. They feel that replication, they have a client base and they can charge because they are the expert, right?

Roger: That’s probably your valuing proposition, when you were starting out, you have to be faster, cheaper

John: Service better

Roger: Or bring more value, so yeah, in your early days you cannot expect to charge at super premium.

John: Yeah because people are gonna shop around , right? The second thing is really not having proper market expectations, right? So you know, as much as your original business plan, you put into your business plan in terms of like geographic area, demographics, and you know realistically how many people will be your ideal customers, you know, your target geographic area, your competitor’s landscape, etc.

Roger: Yup, your projected sales.

John: Exactly. You know all this is not realistic when you’re a real business

Roger: And when you base your financial decisions on these unrealistic market expectations, that’s where you get into trouble. So there’s an old saying , “It always takes twice as long and it cost you twice as much”, so you really need to

John: Lower your expectations

Roger: Lower your expectations on how fast you’re going to get a traction and get a——-what if it’s—-it’s I guess not consistency but you get that critical mass momentum going. It’s going to take you longer. So don’t rely on Yeah we’re taking over the world from the first next 12months.

John: Yeah and you have to remember why you did this in the first place like if you’re looking for quick, fast way to make some money, running a business is not that, it takes you years to gain traction, years to start generating and making a profit, years to actually refine your art and be a good business owner

Roger: Build your brand so you’re known out there in the marketplace.

John: Yeah, build authority, right? And price it the right way

Roger: And have we seen a number of business, new upstart businesses with a business plan. And I’ve certainly seen them where it’s like, this projections are too optimistic, they’re out of the, they’re not being realistic. So, always be thinking about that. That it’s gonna be longer and the sales are not gonna be your, as soon as you think.

John: Yeah, especially if you’re new to running a business, you don’t know what it takes, how many hours you have to put in, do you have a slush fund, do you have enough finances to get you through tough times. So the number 3 thing is, I think we just touch upon that is making sure you have a budget, right? And don’t run over your budget, especially if you are starting off.

Roger: Yes, stick to your budget. And if you budgeting on, as we just mention, sales are up here but in fact they’re not. But you’d, you would set a budget for “hey I can take this expenditure and this and add all this things in”, and it’ll, the business will be able to afford it. And in fact, the numbers aren’t gonna work out that way. So your budget needs to be much more conservative and don’t go above, above and beyond it.

John: Exactly, so budgeting is so critical when starting off a business. The fourth thing I wanna talk about is do not mix your personal and business bank accounts together, right? Because ultimately you wanna separate them, especially for your books, accounting purposes, right? But because you’re running a business, you wanted to just use your business funds for business purposes, your personal funds for personal purposes, right? Keep it separate.

Roger: ‘Coz I think if mixed in there and when it comes a time you’re reporting to Revenue Canada, and your accounting and bookkeeper, it’s gonna be a mess. And you’re gonna take a lot of time off of your business, your valuable time trying to make sales, grow your business but trying to clean up this mess.

John: And figure out if you should incorporate or not, right? Or if you have a partner, partnership, or keep yourself as a sole proprietor, right? So depending on what kind of income you’re expecting to generate as a small business owner. Figure that out as well.

Roger: Yes, yup. The next one is, John, we talked about, and I’d like to maybe speak on this also because you have a small business offer going, but it is properly recording your business and that software, what sort of dozen things in there you know, back-up or things that gets corrupted.

John: Yeah, so accounting softwares are very important and keeping redundant back-ups, right? So, how should you store this information? So, obviously banking software, you know, have your business account separate from your personal, make sure you’re extracting all the statements so that you can retrieve it. Good thing about banks is they always have that statement that you can just print, right? So make sure you’re printing it on a quarterly, semi-annually basis for your own records. And sometimes people like to have that tangible printed paper, statement but it’s good to also back-up everything that you have running a business to external hard-drive. Not just on the cloud where , you know on google drive or dropbox or you know there’s so many different one drives out there where there’s cloud sources to store information. You also wanna have a redundant back-up plan of having it on an external hard-drive.

Roger: ‘Coz, can you imagine if something got corrupted, if you don’t have that back-up, you’re in the dark.

John: Yeah, so what I do, then I do mutual things, I print it, I back it up on a monthly basis, and anything confidential, actually, don’t put it on the cloud.’Coz it’s actually very prone for hackers, right? Especially if you have confidential information, right? Banking info especially. So number 6 is making sure you have proper bookkeeping. So, you know if you are great with your finances, you know which are business expenses, which are personal expenses and which can be claimed at the end of the year.

Roger: Yes. Can be, should be. That’s right.

John: So the the purpose is, really, if you know your numbers and you know your books and you’re keeping it clean, it’s a lot easier when it comes to year end for your taxes to give a bunch of receipts or give software documents to say this is, you know, base on , yeah for business purposes. I bought this for this purpose, right?

Roger: You don’t just take away all your receipts and just throw them into a box.

John: Yeah, accounts, accountants and bookkeepers were not like that. So keep it organized, make sure you know which kind of, you know, segments it is. So if it is for, you know, sales related, or if it’s for fixed assets that you pursed, or is it rental, or salary. Like there’s different sections that you need to just put it in.

Roger: Nice, yup.

John: Right? Buckets, I would say. The next thing is really doing too much yourself, right? Because you’re a business owner, you feel like you probably have to do everything, right? But it’s always important to understand that you can get help and reach out. Yeah, reach out if you need help because there’s a lot of mentors out there, there’s a lot of coaches, there’s a lot of free information, and there’s groups of entrepreneurs.

Roger: Yes.

John: There’s people that actually get together on a regular basis to help each other succeed.

Roger: And the new owner, the new business owner, I know it’s a challenge in that limited funds, meaning you just can’t afford to have extra staff on there. You gonna start growing to it, but it’s that find balance of what is the most effective use of your time. Which is if it’s to grow business and get the customers out there you need to hand-off your bookkeeping. Don’t do it yourself. Hire a professional to do that or what are the things John, hand-off so that it maybe administered functions. Let non-productive, sales productive taken over by somebody else.

John: Yeah, so if you’re a business owner, what is your number 1 reason of doing your business, right? You either are a professional, like you’re a dentist, or you know, chiropractor , you’ve already been trained to do that specific task. Should you do the office manager kind of role as well , like take on all inbound calls, book appointment setting, deal with staff issues, you know, client/customer service stuff, or is it best suited for your time to pay someone a lot less than your time to actually do the work, right? Or if you enjoy the sales function, to take that onboard, let people do other functions that you’re not strong at.

Roger: Because if you try to do too much yourself, yes it looks like you’re saving and your bottomline was better, but you’re not able to scale your business

John: And you’re not productive

Roger: And not being productive

John: Because you are good at certain things and you run, you know, very efficiently doing your certain things. The stuff that you’re not strong at will take you a lot longer and as probably less expensive, just hire someone that’s skilled at it, can save your time and money and do it accurately the first time while you’re doing it multiple times, right? And I think the last thing that I wanna talk about is ignoring your customers. And it can be leads at the beginning, right? Because when you’re starting off, they don’t come often, right? So what do you do when someone actually reaches out or you reach out to them and say they’re kinda interested in what you have to offer.

Roger: And I will tell you, we, I get, I reach out coz some, there are potential clients reaching out to us to help them with their, you know, SEO over time, I reach out to them and their voicemail is full. So as a new business owner, do not even have your mailbox available to leave a message from a—–client or potential client, it’s you’re shooting yourself in the foot .

John: Yeah, so the—there’s so many things, so whenever someone reaches out to you, and your kinda interested, they’re kinda interested, you have to treat them like they are your only client, right? And because it’s revenue, revenue scares at the beginning. You need to do what it takes to get them to pay you because you have expenses

Roger: Exactly

John: You have every ow—a daily, you know, things that you need to pay for, right?

Roger: There is—it’s, it was a very very effective tool years ago, and I know we evolved a technology today that you can go forward and save and email, but actually a live answering service John, that assures, if they’re trained well, you never drop a call, it’s a live personal answering that says I’m gonna page or so right away. Customers whenever you get that, and I know you probably experienced it yourself, you feel like I’m worth something here, I’m feeling valued already because someone live has spoken to me, has taken my content,— or you know my concerns down and someones gonna get back to me right away. That is taking care of customers as opposed to ignoring them.

John: Yeah, and it’s hard when you’re starting off to have multiple expenses, right? So make sure whoever’s calling you just answer every single call, anyone who emails you answer them

Roger: Yup, clear your voicemail or use an answering service.

John: Yeah, clear your voicemail and make sure you’re prompt, right? Because it’s the urgency factor and just imagine you reaching out to someone and you’re interested in their service or product, right? How do you wanna be treated, right? If someone acts and wants your business and makes you feel like they’re deserving to have your business, do wanna work with them.

Roger: That’s right and you see it in many many reviews, I see and you see, we all see it online, someone puts a review in about the business, they were fast, they were prompt, they help me with my problem, they were ca—–whatever it was, you see all the positive responses when you do not ignore that customer.

John: Yeah, and it’s not just providing a great product or service, it’s everything else before and after

Roger: And experience, yup

John: The experience, right?

Roger: Well John, these, I think these eight tips or things to watch out for for a young business and new business, I think it’s been very good. I really appreciate your time, John.

John: Thank you, thank you very much.

Roger: Thank you for watching us today at Local SEO

John: Today.