The number of small businesses being established is consistently growing, however, not all of them are able to achieve financial success. To prevent failure, business owners need to be skillful in avoiding these 7 financial mistakes that are common but can have detrimental effects.

1. Making large and unnecessary purchases

When starting a new company, it’s easy to be lured into spending money on extravagant expenses such as cutting-edge technology, lavish office space, or highly qualified employees. However, it’s important to avoid using your business loan or financial resources on frivolous or personal purchases. Instead, prioritise spending on essential items that are crucial for your business operations. It’s advisable to maintain a lean approach in both your personal and business finances until your company is financially stable enough to support additional spending while still being able to save money.

2. Neglecting business insurance

It’s imperative to prioritise insuring and safeguarding your company, as appropriate business insurance mitigates financial risks associated with unexpected circumstances. However, some small business owners (SBOs) mistakenly terminate their coverage without acquiring a new policy or opt for policies that don’t adequately align with their business requirements.

3. Mixing business and personal banking accounts

Once your business is established, it’s essential to open a dedicated bank account for your business and apply for a business credit card to accurately monitor expenses. It’s crucial to avoid using personal funds or accounts for business transactions and vice versa. Failing to separate personal and business expenses can result in financial difficulties, such as cash flow problems, confusion in tracking profits, difficulties in filing taxes, and hindering the ability to establish clear financial objectives.

4. Incurring credit card debt

It’s vital to avoid accruing credit card debt or overspending beyond your means. Although credit cards are a prevalent tool in business, it’s crucial to acknowledge that they can lead to debt if payment management is neglected. It’s advisable to minimize credit card usage, particularly if you’re uncertain whether you can pay off the entire balance each month. Other options, such as debit cards or a personal line of credit designated solely for business expenses, can be considered. It’s important to ensure that these alternatives are only utilized for business purposes, not personal expenses.

5. Not having an emergency fund

The majority of financial experts concur that having an emergency fund or savings is critical in enabling a business to persevere during difficult times when unexpected expenses arise. Despite the level of planning, unforeseen expenses may still arise. Therefore, entrepreneurs and business owners are encouraged to set aside a contingency fund of at least three months’ worth of expenses that can be utilized for both personal and business purposes.

6. Not planning for tax obligations

Depending on the size of your business, location, and type of operation, your business will have various state and federal tax obligations. If you’re self-employed, you’re responsible for fulfilling your entire tax obligations during the year. To prevent a massive tax bill at the end of the fiscal year, it’s recommended to make estimated quarterly payments to the IRS. Being mindful of the amount owed in taxes and implementing strategies to legally reduce the tax bill can save a substantial amount of money and assist in prolonging your business’s sustainability.

7. Failing to create a budget

Budgeting is an essential practice for managing your finances and expenditures efficiently. It ensures that insurance payments, future tax obligations, and other critical expenses are not overlooked. In the absence of budgeting, there is a risk of overspending, especially during slow sales periods, which may necessitate the need for a loan or result in accumulating credit card debt. Sticking to a budget and establishing clear financial management objectives is crucial for achieving success in the future. While it’s expected that small business owners will make some financial mistakes and learn from them, it’s crucial to be aware of the most common errors to avoid them. Exploring different personal loan options for business owners can be useful in alleviating financial crises.

Are you a veteran-owned business looking to expand your knowledge and network? Attend events, conferences and trade shows specifically for veteran-owned businesses to learn from experts, connect with other veterans and market your business. Or you can join our platform ‘Veterans Growing America’ and take advantage of our professional development opportunities to help you succeed. Not only can you list your business in our business directory but also sell your products on our website, find business resources and much more! 

Starting and running a business can be a challenging task, especially for veterans who are transitioning into civilian life. However, with the right marketing strategies, your business can reach new heights. Here are some marketing tips for veteran-owned businesses.

1. Build a Website:

A website is the cornerstone of any business’s online presence. It is crucial for veteran-owned businesses to have a website that clearly showcases their products or services. The website should be user-friendly, easy to navigate, and visually appealing.

There are DIY website options, but hiring a web designer will help ensure everything is done correctly and free you up to concentrate on other vital aspects of your business.

Make sure your site includes easy-to-find contact and “About Us” pages. Potential customers want to know your story: which branch of the service you were in, what motivated you to become an entrepreneur, and what your goals are. Include pictures of yourself (in uniform and out) and a bio touting your expertise and experiences.

Finally, consider the domain name for your website. Although .com extensions are the most common, finding available names is difficult. Many veteran-owned businesses prefer to use a .us or .vet extension.

2. Use Social Media to attract new customers: 

Having a presence on social media platforms is no longer a nice-to-have but a must-have for small businesses. If you don’t already have social accounts, create one on all the major platforms, even if you don’t plan to use them all now.

To use social media effectively, it is important to identify the platforms that your target audience uses the most and create a strong presence on those platforms. Regularly posting content that is relevant to your audience and utilising paid advertising options can increase brand awareness and drive traffic to your website. Engage with your followers and respond to comments and messages in a timely manner to establish a positive online reputation.

Use popular vet-related hashtags so followers (and friends of followers) can see that your business is veteran-owned. Hashtag popularity changes often; however, currently, the top hashtags are:

• #veteranownedbusiness
• #veteranowned
• #veterans
• #veteran
• #veteranownedandoperated
• #veteransday
• #smallbusiness
• #veteransupport
• #veteranshelpingveterans
• #veteranmade

3. Utilise Business Resources for Veterans to Maximise Success

The Small Business Administration (SBA) and the Veteran Business Outreach Center (VBOC) are just a couple of examples of the many resources available to veteran entrepreneurs.

The SBA offers a wide range of resources including counselling, workshops, and funding opportunities. These resources can help you develop a solid business plan, apply for loans, and access government contracting opportunities.

The VBOC is dedicated to providing veteran entrepreneurs with the necessary training and counselling to start and grow their businesses. They also offer access to capital and other resources.

In addition, there are numerous networking groups and communities specifically for veteran-owned businesses. Joining these groups and engaging with other veteran entrepreneurs can help you make valuable connections, share resources, and stay up to date on industry news and trends.

One such platform is Veterans Growing America, which is dedicated to helping veteran entrepreneurs promote their businesses. The platform features a directory of veteran-owned businesses and provides resources, networking, and support for veteran entrepreneurs.

Utilising these business resources can help veteran entrepreneurs maximise their chances of success. By taking advantage of the available resources and networking opportunities, veteran-owned businesses can gain valuable insights, support, and guidance to help them overcome the unique challenges of entrepreneurship.

4. Join Veteran Networking Communities 

Networking with other veteran-owned businesses can provide valuable insights, mentorship opportunities, and potential partnerships. Platforms such as Veterans Growing America can offer a variety of resources for veteran entrepreneurs.

It offers professional development opportunities, such as conferences, workshops, and seminars. These resources can provide veteran entrepreneurs with valuable insights and strategies to help them succeed in their respective industries.

Veterans Growing America also hosts a weekly Veteran Business Pop Up Shop. This is a great opportunity for veteran entrepreneurs to showcase their products and services to the public, and to network with other veteran business owners.

Furthermore, Veterans Growing America hosts networking events that allow veteran business owners to connect, share ideas, and form relationships that can help them grow their businesses. Engaging with other veteran-owned businesses can also provide opportunities for collaboration and mutually beneficial partnerships.

5. Back to Basics

And, of course, don’t overlook the obvious. Be sure to include the fact that your business is veteran-owned in your email signature and on all your social media profiles.