Common Small Business Mistakes

We Asked Our Readers About Their Biggest Mistakes When Doing Business. Here's What We Learned

18 min read

As part of our blog readership survey (February 2018), we asked the participants about their wins and struggles. One question was:

“What is your biggest mistake in doing business?”

The response we received was so enthusiastic and insightful that it was worth a separate wrap-up. So, below are 20 common small business mistakes according to our readers. We added tips for solving them and can’t wait to hear your perspective in the comments.

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1. Not Taking Enough Action

Not taking enough action is a common complaint, especially for first-time entrepreneurs. Self-doubt, lack of domain knowledge, and a desire for perfection can cause you to dawdle on decisions and put off work.

Not taking action

Here’s what you can do about it:

  • Focus on the “why” of your business to motivate yourself to take action.
  • Develop robust plans and commit to them instead of taking decisions on the fly.
  • Accept that you will make mistakes and that things don’t have to be perfect.
  • Surround yourself with a helpful community of fellow entrepreneurs.

A productive environment can help as well. If you’re working from home, read this article to create the perfect home office.

Also read: Productivity Hacks for Small Businesses

2. Not Being Able to Promote Your Products

Entrepreneurs who don’t come from a marketing background often struggle to put themselves out there.

If you don’t know whether a marketing tactic will work, you’ll be jumping from one marketing tactic to another. When you’re desperate for growth, any tactic that promises faster results can look more attractive.

Trying too hard to get noticed

The solution is to adopt a more measured approach to marketing. Start by:

  • Adopting a proven marketing plan and committing to it
  • Arming yourself with better marketing knowledge
  • Outsourcing marketing activities you’re not comfortable or experienced with.

Refer to this article on designing a social media strategy to get started. Also make sure that marketing is a core part of your business plan.

3. Not Defining the Market Early Enough

As any seasoned entrepreneur will tell you, the product-market fit is one of the keys to business success. You can have the best product in the world, but if you don’t sell it to the right people, you won’t make any sales.

Worse, you’ll lose marketing dollars (and time) pitching it to the wrong audience.

To define your target market, you need two things:

  • A deep understanding of your product and the problems it solves.
  • A deep understanding of your customers and the problems they face.

Product-market fit lies in finding the point where the customers’ problems and your product’s solution intersect.

Start by studying your product in-depth and test its viability. Make a list of all its features and who they would appeal to. Analyze your competitors and their customers.

Create e-commerce customer personas — it will help you in defining your target audience better.

4. Not Starting Sooner

There is an old Chinese proverb: “The best time to plant a tree was 20 years ago. The second best time is now.”

Lots of businesses feel they should have started earlier. Some didn’t start because they didn’t have the time or money. Others hesitated because they didn’t have the expertise or the right tools.

If you’re still on the fence, know that you will eventually regret not starting sooner.

Not starting sooner

The good news is that starting an online business is easier and cheaper than ever. Refer to this guide to learn how to create an e-commerce business from scratch.

5. Not Buying Enough Stock

Inventory management is a critical but overlooked aspect of e-commerce. Carry too much stock and you risk losing money. Carry too little and you’ll struggle with order fulfillment.

To estimate inventory, calculate the best-case and worst-case scenario for the following:

  • Total organic traffic you can drive to the store
  • Total paid traffic you can buy with your budget
  • Estimated “spikes” in sales due to referrals (such as being featured in a website)
  • Conversion rates for stores in your niche, broken down by traffic source.

For example, stores in your niche might have 1% conversion rate for organic traffic. You estimate that your store can get 50,000 organic visitors/month. At a 2% conversion rate (best-case scenario), you’ll make 1,000 sales. At 0.5 conversion rate (worst-case scenario), you’ll make 250 sales.

Anything between 250-1,000 would be enough stock in this case.

Refer to this article on Maker’s Row to learn more about inventory management.

SmartInsights has a breakup of conversion rates by industry and audience.

Read this article to ensure inventory accuracy in Ecwid.

6. Not Being Visual Enough

Online retail is all about visuals. Since customers can’t see and feel the product, they rely on high-quality images and videos. In fact, 75% of shoppers say high-quality pictures is the most important factor in their shopping decision.

Making your store more visual involves several things:

Refer to our guide on visual merchandising to improve your store’s visuals.

7. Not Outsourcing Activities

First-time entrepreneurs often struggle with delegating work. They feel that others won’t be able to do as good a job.

Not outsourcing work

The problem is even more acute with outsourcing since you can’t actually see the worker.

Solve this business mistake by:

  • Outsourcing only non-critical work at first
  • Developing a robust communication plan to evaluate and instruct workers
  • Gradually scaling up outsourcing operations to more complex tasks.

Outsourcing doesn’t always work and you will run into some bad apples. The key is to push through initial failures until you find people you enjoy working with.

Neil Patel has an in-depth guide on outsourcing. Read this article to evaluate and manage remote workers. Use Upwork to outsource your work.

8. Not Approaching Big Investors

While there is certainly a virtue to be made out of bootstrapped success, good investors can unlock a lot of value. Approaching them, however, can be intimidating.

What if they don’t like your idea? Do you even have the metrics to get them interested?


The first thing to understand is that big investors want one thing above anything else: a positive ROI.

You don’t have to be from MIT or Harvard Business School to attract investment. If you have an idea, growth, and a path to profits, investors will listen.

Next, follow the advice in this article to create your business plan. Gather your metrics, team, and any credentials that will make you more attractive. Good bookkeeping practices can help here. Condense your idea, metrics, and market into a short pitch. Use Founders Institute’s “madlibs” approach to write it.

Make sure you approach investors when you’re on the top of your game (in sales). This can help you land a better deal.

9. Hiding Out of Stock Items

Sometimes, you want to sell a product but don’t have it in stock yet. Maybe its stuck in manufacturing. Or maybe you’re not ready to launch them in the market yet.

Removing these products altogether from the store means two things:

  • You won’t build any presence in search engines for them
  • You won’t have any way to estimate customer demand.

If you have a lot of such pages, your store will also look “empty”. Instead of hiding those products, simply remove the “Add to Cart” button from the product page. This way, your store will act as a “product catalog”. That will allow you to run promotions and gather customer data without actually putting the product for sale online.

Refer to this article to turn your store into a product catalog.

Read this to create a more flexible product catalog.

10. Not Investing in Customer Service

When you’re starting out, a single angry customer can ruin your business. If this customer is motivated enough, he can easily muster an online mob and leave your reputation in tatters.

There is no easy antidote to angry customers. You have to play the long-game of investing in customer service.

customer service

At the very least, make sure that you address common customer problems:

  • Keep customers in the loop about delays, quality issues, etc.
  • Practice transparency in pricing, shipping, returns, and manufacturing.
  • Adopt an honest, personal tone in all your communications.

Most customers will give young businesses a long rope. But if the product quality and customer service quality are both bad, they’ll turn on you quickly. At the very least, you should be honest and upfront about your issues. Don’t pretend to be bigger than you actually are. And don’t promise results you can’t deliver.

Read this article to learn how to deliver delightful customer experiences.

11. Not Making Detailed Plans

They say that failure to plan is to plan to fail.

failure to plan

Nowhere does this apply to more than e-commerce.

A detailed plan might seem like a waste of time when you’re starting out. Once you actually start, however, it will save you countless hours and bad decisions.

Start by making a business plan. Even if you don’t have any investors, it helps to organize all your ideas. See this article for an example
of a real-world business plan.

Besides a business plan, you should also have a detailed marketing plan. This should include SEO, social media, and paid channels.

Read this article to learn how to design a social media marketing strategy.

Read this article if you want to start selling globally.

12. Not Buying All Domains Associated With the Business Name

If you have the .com version of your name, you’re good to go, right?

Not exactly.

Competitors and domain squatters can easily buy the .net, .org, and country-code extensions of your domain to mislead customers.


You can try to sue them, but it will take way too much time and money that you could spend elsewhere. Keep yourself safe by buying all important versions of your domain name. At the very least, you should have the .com, .net, and .org. If you operate in a country other than the US, also buy your local country-code extension (.de, .in,, .ru, etc.).

Here are some platforms to buy your domains from and tips for buying the perfect domain name for your store.

13. Not Investing in SEO

SEO is one of the best sources of long-term, targeted, and free traffic to your store. Not planning for SEO from the start can cost you later.

SEO should be a factor in every decision you make, especially the following:

  • Your product catalog must be logical and SEO friendly.
  • Your store design should be content focused and load fast.
  • Your product descriptions, content pages, blog posts, etc. must be keyword rich.

Investing in SEO will give you incremental returns over the life of your store. As you build backlinks and gain authority, you will drive more and more traffic from search.

Read this in-depth guide to e-commerce SEO to get started.

14. Not Using High-Quality Raw Materials

It doesn’t matter what you sell — clothes, shoes, furniture, food — the quality of your products is crucial. To get quality products, you need quality raw materials.

Start by deciding whether you want to make, manufacture, or wholesale your products. If you choose the “manufacture” route, use this guide to find a manufacturing partner. If you decide to make your own product, you’ll need to contact suppliers. Read this guide to understand the science of contacting suppliers.

The quality of your end product will depend on the quality of the ingredients that go into it. Make sure to try out several suppliers before deciding on one.

15. Not Watching Your Finances

It’s easy to lose track of boring details such as bookkeeping when you’re first starting a business. The thrill of building, promoting, and selling your own products often makes people forget that there is a business side to things.

wasting money

Make strong bookkeeping a priority for your business right from day one. Use accounting apps to keep track of every penny flowing in and out of the business. Set aside a fixed budget for all expenses. Make sure that it aligns with the estimated expenditure in your business plan.

Until you can hire an accountant, it’s also a good idea to learn small business accounting basics.

16. Not Setting Aside Enough Money for Marketing

A common business mistake is spending so much money on developing the product that you have none left for marketing it.

This often happens with first-time entrepreneurs who’ve never developed a product before. They might have a budget for development, but they end up going over it.

If you’ve ever encountered this situation, ask these questions:

  • What features does my product have? Which of these are “must have”, “good to have”, and “nice to have”?
  • How much does each feature cost to implement? Can you remove some “good to have” and “nice to have” features to cut costs?
  • What materials does the product use? Can you substitute some materials without compromising the quality substantially?
  • Can you find another supplier or manufacturer at a lower price?
  • Can you save time and money on shipping?

Your goal should be to get the most viable version of the product without overshooting the budget.

If possible, try raising additional funds by crowdfunding its development. Here’s a short guide on crowdfunding for online sellers.

17. Not Selling Worldwide from the Beginning

The internet allows you to sell to any corner of the world. Yet, many businesses delay international operations, costing them thousands in lost sales.

Selling globally can be intimidating. Customs, shipping, refunds, and payments become much more complicated across borders.

Thankfully, solutions like Ecwid have made this easier than ever. Ecwid integrates with a number of payment gateways, making it easy to accept payments from anywhere. It also works well with several international shipping and fulfillment services. You can even optimize your store for international customers.

For more information, read this article on selling globally.

18. Not Hiring Enough Employees

It’s easy to fall into the trap of saying “not yet” when it comes to hiring employees. After all, your finances are limited and employees are expensive. You also have to worry about finding, interviewing, onboarding, and training new recruits.

self five

Not having enough workers can take a toll on your time, motivation, and resources. You can get stuck doing mundane tasks (such as order fulfillment) when you could be doing something more transformative (such as developing a new product line).

The solution is obvious: hire people as soon as you need them. A good employee brings much needed energy, insight, skills, and enthusiasm to a growing business. The initial costs might be high, but the returns over time are worth it.

For more information, read this article on hiring workers for your online store. If you’d rather work with freelancers, see this guide on working with contractors.

19. Not Balancing Work and Life

As an entrepreneur, you have no fixed hours. Your work doesn’t stop after 6 pm. You’re thinking about your store 24 hours a day, 365 days a year. As a result, many entrepreneurs struggle to find work-life balance. It’s common to think that any time you don’t spend on your business is time wasted.

Such thinking is actually counter-productive. Entrepreneurial work isn’t linear. You can’t create 10x better marketing campaigns by spending 10x more time thinking about them.

Set aside time to relax. Not only will it make you happier; it will also make you a better entrepreneur.

20. Overthinking

Have you ever heard of “paralysis by analysis”?

Sometimes, you can overthink a decision so much that you’re unable to take any action.
First-time entrepreneurs often go through this problem. Since they have no prior experience, they overthink the decision and hesitate to make a choice.

The first thing when dealing with this problem is to forgive yourself. You’re not the only one who over-thinks issues. Countless entrepreneurs go through the same thing every day.

Next, arm yourself with knowledge. The more you understand a problem, the more confident you will be in making decisions. Go through the Ecwid blog and find topics related to your problem. Use this knowledge to stop thinking and start deciding.

Making mistakes is a part and parcel of running a business. The important thing is to analyze your mistakes and learn from them.


Have you recognized yourself in these mistakes? What other mistakes have you made in your business? Let’s chat in the comments below!

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About the author

Jesse is the Marketing Manager at Ecwid and has been in e-commerce and internet marketing since 2006. He has experience with PPC, SEO, conversion optimization and loves to work with entrepreneurs to make their dreams a reality.

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