All small business owners make mistakes—and that can be a good thing. It means we’re taking risks, and that’s how we grow our businesses. But making too many mistakes during the startup phase could land you in trouble. The key to small-business survival is to learn from your missteps and those you see other businesses making.
Mistake 1: Setting your prices too low or too high. When it comes to pricing, service businesses have it a little tougher, since there isn’t a clear-cut cost of goods, and it’s easy to underestimate the time a job will take. Consult an association for your particular industry to help determine average prices for your type of business, clientele and location.
Mistake 2: Working without a contract. Contracts or letters of agreement (LOAs) are there to protect you, spell out each party’s expectations, and establish deadlines and payment schedules.
Mistake 3: Being inflexible. Things change. Sticking with your business plan when the market has shifted makes no sense. You need to frequently ask yourself, “Is this working out the way I thought?” If it’s not, it’s time to move on to Plan B.