Top 5 mistakes new business owners make and how to avoid them
Going into business for yourself is a dream shared by many people — but many businesses fail within two years of opening. According to data from the U.S. Bureau of Labor Statistics, 20% of small businesses fail in their first year, and 50% of small businesses fail before the end of their fifth year, as reported by fundera.com.
If you are thinking of opening a business, consider this list of potential pitfalls and see how the SpeeDee Oil Change & Auto Service® business model guards against these mistakes.
Not setting aside enough capital to fund a business is probably the most common mistake. New owners often believe that their company will start making a profit almost immediately, or they underestimate the amount of funding they will need.
SpeeDee has guidelines for franchisees that let them know how much capital they will need to not only start a business, but also sustain it during its ramp-up phase. Keep in mind: You also need to budget for your own living costs and unexpected expenses. You’d be surprised how many people don’t.
Another mistake is choosing the wrong location for a business. It’s important to locate where a business will be noticed. Checking demographics is also important to ensure that a service is needed in the area.
Why open a lunch cafe in an area where residents commute for work and are away during the day? Why open a fancy boutique in an area with low incomes or no foot traffic?
SpeeDee uses mapping tools as well as predictive analytics to project the performance of given locations. In addition, we may conduct an in-person inspection to check for issues such as the visibility of a location, curb appeal, and signage.
We assist franchisees in negotiating locations, bringing the knowledge we’ve gained from negotiating hundreds of purchases and leases. At SpeeDee, we have your back.
Insufficient and inconsistent marketing
Finding a great location is a huge factor for helping you acquire customers, but great visibility isn’t enough. You also need comprehensive and consistent marketing to attract new customers and encourage repeat business.
At SpeeDee, we help new franchisees with local marketing, so they reach potential customers in a cost-effective way. We teach how and where to market for best results.
We provide online SpeeDee-branded templates to use for your local direct marketing efforts and more — which makes it quicker and easier for you to execute marketing campaigns around your store. In addition, the SpeeDee marketing team manages marketing programs on systemwide and regional levels to increase brand awareness.
When starting a new business, owners need to get processes in place as soon as possible – processes such as:
- setting up and maintaining accounting and invoicing
- managing the banking
- marketing the business
- updating social media
- responding to email, texts, phone calls, and voicemails
- finding vendors
- hiring employees
- establishing policies such as an employee handbook or operational handbook
- using a customer relationship management platform to communicate effectively with customers
Often small-business owners don’t think about how they will manage these tasks or how much time to allow for them. Also, these processes take time away from providing services to customers.
With SpeeDee, the bases are covered. Policies are already in place. Each SpeeDee owner has a support team that helps franchisees at every stage: Finding locations, handling construction, training owners and staff, assisting with grand openings, marketing support, and operations support once a location is up and running.
Fellow franchisees are a great resource, too. They’ve already done these things and often have advice for newcomers.
Failing to delegate
A failure to delegate often goes with having undeveloped systems. If an owner doesn’t have a process in place for completing a task, then employees don’t know what to do, or they may do a task incorrectly.
An owner needs to have help, especially in the areas where they’re less skilled. Someone who is great at marketing might not be good with numbers and needs a bookkeeper. Or it could be the other way around. No one person can do everything that’s needed, so delegating is necessary.
At SpeeDee, we help our owners delegate. Our support teams can show owners how to delegate the responsibilities that employees can manage.
Our marketing team will guide the owner with attracting customers. Our training support team will ensure new owners and staff are certified. Once the initial training is completed, we have an online platform with 250 courses so everyone can keep learning.
To find out more about the business opportunity with SpeeDee, fill out the form on this page to download our free franchise report.