3 Key Mistakes Small Business Owners Make

Did you know that 67% of small business owners launch a business because of a personal passion? I’m not at all surprised since I believe most entrepreneurs want to make a bigger difference and create a lifestyle doing the things they know, love, and find fulfillment from pursuing.  Tammy Lam’s infographic for Intuit illustrates even more great information on how small businesses get started and operate on a day to day basis.  I’m going to share 3 key mistakes small business owners make when they focus on passion rather than profit.

Confusion to Clarity

I, and many of my clients, fit into that 67% perfectly! I began my business because of a passion to help heart-centered entrepreneurs move through the maze of starting a business and launch with clarity and success…to help them be able to Dream Big and Launch Bold. I was seeing how confused and overwhelmed small business owners were, in spite of their passion, enthusiasm, and talent. Because of the overwhelm they were unable to take what they learned from many excellent courses and sources, map it into a strategic plan, and successfully launch a business that makes enough money to keep going.

Passion to Profit

Let’s face it, we can launch a business because of a deep passion for something, but to keep making that difference we strive for, we have to find ways of creating cash flow, even if that isn’t the driving force behind why we are in business (only 21% of us start a business to pay the bills).

3 Key Mistakes Small Business Owners Make

In the years of working with self-employed professionals like coaches, trainers, consultants, healers, and authors, as well as small business owners, helping them launch and reinvent their businesses, I have found these 3 key mistakes small business owners make that impact their financial success.

  • Failure to identify a clear mission and vision for their business
  • Failure to establish a strong legal, financial, and sustainable business foundation
  • Failure to strategically plan a successful launch 

I’ve seen that, because they are more passion driven, most small business owners are just not savvy about the business side of their work.

Why?

  • We think it takes too much time
  • We believe it takes too much money
  • The financials like managing cash flow, budgeting operating costs, and tracking profit margins seem like a foreign language to those of us who are passion focused
  • The “business” part of business feels like the “boring” part of business and isn’t what drives our passion

But the truth is, if you resist getting the help needed in these critical areas of your business you are likely to get stuck, give up before success is realized, run short of cash flow, and ultimately work really hard to launch your business only to see little in the way of returns on your investment of time and money. You gradually begin to lose confidence in yourself, and the support of those closest to you.

It doesn’t have to be this way. You can be a business focused owner who is passionate about serving others with your expertise. You can operate a business on sound principles, still be creative, and have the time to pursue those things most important to you in business. You can successfully merge the business side of things with your personal passion.

Are you in the 67% or the 21%?

What do you most struggle with in the business side of things? Check out my article on 10 Things You Should Know to Launch Your Business for more help.

Please share your answers with the rest of us by posting in the comments section below!

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Comments

  1. Great post, and thanks for checking out our blog!

    • LetaRussell says:

      I love to visit your blog! Not only is the info relevant, but as an avid mind mapper, the visual graphics you create make it fun and interesting. Thanks for dropping by, Tammy!

  2. So much truth in this article Leta! Following your example right now I am finalizing putting the legal and financial business foundation. I definitely don’t like numbers, although I was good at math in school, but I don’t like looking at the numbers in my business… so I am putting a person in place to take care of that and keep me informed on a monthly basis of what’s happening, so it’s easier to know what actions are needed for the future.

    • LetaRussell says:

      That’s smart, Didi! I love numbers, too, but don’t particularly enjoy the bookkeeping. I’ve finally figured out a system that works for me so hope you can, too. I know it will free you up to do the things that you love and are really good at.

  3. Hey Leta,
    This article really hit home for me as I, too, am one of those passionate business owners you describe. The passion keeps me going, but the reality of what it takes to really run a business profitably was not clear to me in the beginning of my entrepreneurial journey. Because of your teachings, I am determined not to be one of the millions of small business casualties that occur every year — not because of lack of passion, but because of lack of cash flow and good business management skills. Thank you for sharing your insights about this critical part to building a successful business! It is a message that can’t be shared enough.
    Mary Lou

    • LetaRussell says:

      It’s exciting to see how your business is starting to blossom with just a few adjustments, but even bigger mindset shifts, Mary Lou. I’m confident that with the steps you’re taking, your business is going to see increased revenue and profits this year. It’s a pleasure to be in mastermind with you!

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