3 Costly (but Common!) Mistakes Made by Small Business OwnersDATE: August 14th, 2019
In the 2018 Small Business Profile, the U.S. Small Business Administration (SBA) estimated that there were 3.9 million small businesses in California –employing almost half of the state’s workforce. That’s an impressive number, and it’s one that we want to rise in 2019. However, the SBA also reports that approximately half of all small businesses close before they hit their fifth anniversary and only one-third will survive for a decade.
By their very nature, each small business is unique, but there are common risk factors that impact small businesses, regardless of industry, location, and business model. And these risk factors all-too-often turn into costly (but avoidable!) mistakes.
Here are the three most overlooked small business mistakes – because, ultimately, the risks we fail to recognize are the ones that are most dangerous.
Small Business Owner Mistake #1: Doing Everything Yourself
Whether you’re an attorney, hairdresser, inventor, or manufacturer of widgets, you went into business because you have a skill that you wanted to bring to market (and probably not because you have a passion for business management and strategy). Many small business owners fall into the trap of trying to handle everything on their own, but that can be a major waste of your most important resource: your time.
Small Business Tip #1: Throw out the idea that you need to do it all by yourself. There are reliable professional services companies specifically designed to help small business owners streamline and simplify their back-office tasks with outsourced human resources, bookkeeping, legal consulting, etc. It’s time to assemble your team of advisors.
Small Business Owner Mistake #2: Not Establishing Processes & Policies
Incremental growth often results in a piecemealed business structure, which can be incredibly dangerous. Without proper processes and policies in place, you’re putting yourself at risk for a wide range of issues, including (but not limited to) lawsuits from employees, reputation damage from quality inconsistencies, and profit losses from billing oversights.
Small Business Tip #2: Too many small business owners avoid this issue because they don’t know where to begin. Start with your employee handbook – the roadmap to your company. Partner with a specialized Small Business HR Consultant to evaluate your employee handbook (if you have one) or to develop one (if you don’t). As you work on your employee handbook, you’ll naturally uncover gaps in your current policies and procedures – which you’ll then be able to tackle one by one.
Small Business Owner Mistake #3: Thinking You Can’t Afford Support
Every time we hear small business owners say that they can’t afford professional support, we think about this quote:
“If you think it’s too expensive to hire a professional, wait until you hire an amateur.” – Red Adair
When working with a tight budget, it can be tempting to take a do-it-yourself approach to the business side of things. Far too many small business owners operate under the false assumption that they can’t afford professional support, so they tackle the company’s HR, bookkeeping, accounting, and marketing tasks all on their own. But what takes you hours would probably only take minutes for an expert – and you’ll be able to trust their results whereas you’ll constantly be second-guessing yours.
Small Business Tip #3: Say goodbye to the myth that you can’t afford to hire quality professional services providers. Technology has revolutionized how these companies are able to deliver their services, so you now have options you may not have had in the past. Find one local professional services provider that specializes in providing resources to small businesses, and they’ll be able to help you find other affordable solutions.
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CaliforniaLabor Solutions LLC (CLS) is a different kind of human resources consulting firm. Our “scalable services model” ensures Comprehensive HR Solutions are accessible even if clients have small business budgets. We saw too many small and medium-sized businesses fall victim to unrecognized (yet easily solved) risk factors, so it became our mission to deliver our large-firm expertise to clients of all sizes.
Our HR Consulting Services include: HR Outsourcing, Regulatory Compliance Solutions, and Supplemental HR Support (for in-house teams).
Don’t wait for something to go wrong. There’s no risk in starting the conversation today. Contact us by emailing email@example.com or by calling (800) 949-2049.