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For Your Small Business Corazon Gritar April 29, 2024

4 Common Mistakes New Small Business Owners Make Financially

Running a small business is a learning opportunity most of the time which, with proper planning, can result in an amazing life venture. You need to take your time at the planning stage to ensure that there’s a low likelihood of something going wrong. This is especially the case for the finances, for which you need to have a realistic budget. This article explores four of the most common financial mistakes new small business owners make and how to avoid making them.

1. Not Having an Emergency Fund

One of the main issues business owners run into involves finances. It's important to start an emergency fund for your business so that you can have some money available for emergencies. With an emergency fund in place, you can handle a number of issues that could come up, including legal ones. If need be, you can hire a lawyer to help you navigate a legal issue that you find yourself involved in. As a result, you can easily access the help and information you need, such as finding the types of relief that can be obtained for business torts which includes injunctive relief, punitive damages, and compensatory damages.

2. Failure to Plan for Marketing

You also need to add marketing to your budget and put a plan in place while working with a professional. This way, you can be assured of reaching as many people as you can, allowing you to grow your business exponentially. The expert you hire should be in a position to help you do the right thing in terms of marketing. That’s because they should know that consumers actually retain 95% of the message in an advertisement that’s watched as opposed to a mere 10% that they retain when it’s read. By allocating as much money as necessary for budgeting, you can get marketing that will help you scale up in a reasonable time.

3. Hiring the Wrong People

Your business is going to rely heavily on the team that you hire. That's why you need to find the best people so that you have a good chance to offer the very best to your customers. This can help you outshine the competition, which in the U.S. numbers 33.2 million small businesses, according to NerdWallet. Working with a professional recruitment expert will help with your hiring plans and results.

4. Not Writing a Comprehensive Business Plan

Finally, you need to have a good business plan in place if you hope to have an easier time getting everything done. A business plan essentially outlines the steps that you need to follow to achieve certain outcomes. It can also have a number of goals in place, so you can use it to see the progress your business is making. You can make the necessary changes to help you get the best outcome in this case, using plans that you put in place early on to ensure that your business thrives.

Take time to make sure that you don’t make any of these mistakes as you grow your small business. As a result, you can avoid running into issues that a majority of small businesses run into at various stages of operation. If possible, don’t hesitate to outsource anything you need done to the right, capable people. This can save you time and help you avoid costly mistakes.

Connect with an Old National Small Business banker for more insights to help your business grow.

This article was written by Corazon Gritar from Len Penzo dot Com and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.

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