When small and medium-sized business owners make mistakes they can sink the entire enterprise, so the best way to prevent them is to catch them early.
A new report by Square found 46 per cent of mistakes were made during the first year of business and 37 per cent were made in the second year.
Poor planning/strategy was the most common type of error at 55 per cent, followed by staffing/HR at 44 per cent.
Leslie Jackson of Square Canada says fatal errors go beyond forgetting to order toner for the printer.
“We heard about business owners who made big accounting mistakes, who failed to compensate staff appropriately and made poor business projections,” Jackson told Yahoo Finance Canada.
“A concerning aspect of this is the fact that these mistakes are also being made by business owners who had five or even 10 years of experience.”
Square says business owners should seek out a mentor to help avoid early missteps, like the one that cost Giovanna Minenna $20,000 when she was opening her very first Brows by G location. To adhere to the Winnipeg health code, she needed individualized sinks in each room.
“As a new business owner, I overlooked this step in combing through the bylaws and knowing what the health and safety inspectors look for,” Minenna told Yahoo Finance Canada.
“My business was also a very new service being offered so there was a lot of confusion and lack of communication about the necessary steps.”
Even though she was in a deep hole, with the help of a mentor, Minenna recovered and today her business is thriving.
“As I continued to grow my business, I continued to seek mentorship through organizations, accelerators and business coaches who helped me with self-discovery and my business objectives,” said Minenna.
Minenna says the role of a mentor is evolving as her business grows.
“At first, it was about looking over my business plan, ensuring we had the right systems in place and helping solidify it as a real business,” she said.
“When we started hiring employees, they helped with the next steps as well.”
Despite her early struggles, when asked if she would do it all over again she says “100% yes”!
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains