Did you know that the majority of new Calgary small businesses will never turn a profit? Rather than being discouraged by this fact, you should take the opportunity to learn from the mistakes of others. By avoiding mistakes that are commonly made by new business owners, you can ensure that your business will be one of the ones that succeed. Here is a look at five of the most dangerous mistakes that your business should avoid.

1. Too Much Micromanagement

Chances are that you had a clear vision that led you to the creation of your small business. Since this vision is probably very dear to your heart, you will face the temptation to be as hands-on as you can in order to ensure that the reality of your Calgary business is as close to your vision as possible. You must resist this temptation. Hire a strong staff of people that can be trusted to produce the results that you desire. It is necessary for you to be comfortable with delegation so that you are free to focus on matters that only you can handle. Feel free to give input when necessary, but do not try to do everything by yourself.

 2. Poor Marketing

If you are confident in the product or service your company provides, you might think that it will sell itself. Although a reputation for quality will ensure repeat customers and word-of-mouth growth, you have to get people to come through the door first. It is important to have a marketing plan that is multi-pronged and affordable in the long term. A lazily built Facebook page will not suffice. Most new businesses spend too little money on marketing, yet dollars spent on marketing often offer the biggest returns.

 3. Poor Handling of Finances

Calgary small business owners are often passionate people who are primarily focused on achieving a specific vision. Although many of these owners are very knowledgeable about their field, they know very little about managing money. No business can be financially successful without the proper handling of its money. Hire a bookkeeper and a Calgary accountant that specialize in small businesses.  Companies like Padgett Business Solutions, can properly evaluate your finances, minimize your costs and maximize your profits.

4. Underpricing

If you are looking to establish yourself in a market, it is important to have competitive rates. Don’t be afraid to charge slightly less than your competition. However, you should also avoid charging prices that are too low. Very low prices might make people believe that your product or service is of a poor quality. If you do manage to build a customer base at prices that are too low, you risk scaring everyone off if you ever have to increase your prices to a more reasonable number.  A better approach is to focus on your unique position in the marketplace and use that difference to charge the right price in the beginning.

5. Underestimating Startup Costs

Many businesses that should have been successful wind up going out of businesses simply because they didn’t have enough startup money. It is not enough to have resources to get the business up and running. Even if your business is destined for success, you might not turn a profit for a very long time. You must have access to enough money to keep the lights on for up to 18 months.

Padgett Business Solutions offers a Reality Check that compares your company’s financial situation to others in your industry.  This might be able to help you with points 3-5 above.

Opening up a new businesses is a very difficult undertaking. However, business ownership will yield great rewards if you manage to survive and prosper. If you learn from the mistakes of those who came before you, you can maximize your chances of success.