Businesses mistakes are prone to happen when a new organization is experiencing growing pains. From the startup phase through growth, this is the time for a small business to establish a strong foundation for its future.
But missteps during the pivotal building stage can ultimately make or break your business; and since 20% of small businesses don’t survive past year one, knowing how to avoid these mistakes can be extremely valuable.
Here are five small business mistakes commonly made early on and how to avoid them when establishing a strong foundation for the future.
1. Not Having a Recruitment Strategy
Research from CB Insights found that nearly a quarter of businesses fail because they don’t have the right team. For a startup to survive, its leaders must identify roles that are necessary to build the business and then recruit the best talent to fill those positions. This takes careful planning and a strong employer value proposition to attract the right candidates.
2. Not Offering Competitive Salary and Benefits to Employees
In the early days of a business, money can be tight. But this doesn’t mean that the employees should suffer. If a business is hoping to earn more and grow, it must pay its people well and offer them an excellent benefits package. When employees are healthy and not worried about finances, they can focus on business growth.
3. Not Using Software to Track HR and Payroll Functions
Managing people is time-consuming and generates large amounts of data. This small business mistake can be avoided by investing in a scalable human resource management system (HRMS). This software handles everything from recruitment to payroll, making it possible to track human capital metrics, strategize for future goals, automate payroll deductions and more.
4. Not Establishing Standard Operating Procedures
Running a business without standard operating procedures is like taking a road trip without a map. This leaves the business vulnerable to errors, assumptions and misinterpretations—a risky route that’s better left unexplored. Implement key procedures from the get-go, and as the business grows, keep the ones that are working well and ditch the ones that aren’t. Work with team leads to establish new rules to meet evolving needs, and ensure that employees are trained on all of them.
5. Not Offering Professional Development to Managers
One of the top reasons that small businesses fail to thrive is poor management. Gordon Tredgold, founder and CEO of Leadership Principles, writes for Inc., “Too many people with the wrong skills get promoted. Yes, they may be technically gifted, they may be incredibly smart, but that doesn’t make them good leaders.”
It’s imperative that managers receive adequate training to become great leaders. Because when managers go beyond delegating tasks and inspire their teams, they can ultimately boost engagement and morale. And when you’re trying to grow your business from startup to Fortune 500, you’ll need all the help you can get from each and every staffer. Lead them, and they’ll lead you to your business goals.
Some business mistakes are inevitable early on, but when you support your team and are willing to adapt along the way, you’ll be ready not only to weather change but also ultimately to come out on top.
Visit United Concordia Dental’s Benefits Bridge for more tips on improving morale at your small business.