The Top 5 Mistakes Small Business Owners Make—And How to Avoid Them

Posted on May 21, 2025 by Tina Collins, One of Thousands of Business Coaches on Noomii.

The Top 5 Mistakes Small Business Owners Make—And How to Avoid Them

As a business coach, I’ve seen firsthand how small missteps can slow growth, drain profits, and even derail the most promising teams.

The good news is that most of these mistakes are avoidable with the right awareness, systems, and mindset.

If you’re leading a growing business, here are the top five mistakes I see most often and how to avoid them so your company can scale smoothly and sustainably.

1. Wearing Too Many Hats
The Mistake:
You’re the CEO, CFO, sales manager, marketing lead, head of HR, and, on some days, the customer service rep, cleaner or handyperson. Sound familiar?
Why It Hurts:
Doing everything means you’re stretched thin, being reactive instead of strategic, and likely not doing anything as well as you could.
Do you feel like you are constantly firefighting?
You know what you need to do or want to get done each day, but the day gets derailed with things that have to get done.
One consequence is that your team can become overly dependent on you, stifling their own growth as you are too busy to delegate pr train them effectively.
How to Avoid It:
Start by delegating outcomes, not just tasks.
Hire or promote team members into true ownership roles—even if it starts with just 10% of their time.
Build systems that make your business less reliant on you. It’s the only way to grow sustainably.

2. Avoiding the Numbers
The Mistake:
Relying on gut instinct instead of financials, KPIs, and performance metrics.
Why It Hurts:
If you don’t know your numbers, you’re driving blind. You might be overspending, under-pricing, or missing opportunities to optimise.
How to Avoid It:
Track key metrics weekly and monthly – looking at the numbers that really matter within your business, such as profit not turnover, revenue per employee, profit margins per service/item, customer acquisition cost, and cash flow.
You don’t need to be a CFO, but you do need to be financially literate.
If this isn’t your strength, get help. It pays off quickly.

3. Hiring Reactively Instead of Strategically
The Mistake:
You wait until you’re overwhelmed to hire, or you hire quickly just to “fill a gap.”
Why It Hurts:
This often leads to the wrong hires – people who aren’t aligned with your culture or long-term needs. And bad hires are expensive.
How to Avoid It:
Recruitment is becoming increasingly challenging with ‘ghosting’ on the increase so have a plan to acquire and develop talent.
Create a 6–12 month hiring roadmap based on your business goals. Hire ahead of demand where possible and take your time to find the right people.
Define clear roles, responsibilities, and success metrics before you start interviewing.

4. Not Having Clear Processes
The Mistake:
Your team “just knows” how things are done. Processes live in people’s heads, not in systems.
Why It Hurts:
Without standard operating procedures, you’re vulnerable to mistakes, inefficiency, and dependency on individual employees.
Training new people becomes a nightmare and ensuring quality control is virtually impossible if everyone can do their own thing.
How to Avoid It:
Document as you go.
Every time you or a team member completes a task more than once, write it down.
Use simple tools like Loom, Notion, or Google Docs to start building your process playbook.
This builds a business that runs on systems—not people.
Get the newest employee to review the procedure as it becomes a QA and teaching tool, plus adds resilience if someone needs to provide cover.

5. Failing to Evolve as a Leader
The Mistake:
Running your company the same way you did when you had 3 employees … even though you now have 10 or 20.
Why It Hurts:
As your team grows, your leadership style must evolve.
What worked at one stage of growth becomes a bottleneck at the next.
How to Avoid It:
Invest in your own development.
Learn to delegate more.
Communicate better.
Lead with vision, not micromanagement.
And most importantly, surround yourself with other leaders (coaches, peer groups, mentors) who challenge your thinking.

Final Thoughts
If you’re making one (or more) of these mistakes, you’re not alone. The key is not perfection—it’s awareness and intentional action.
Small businesses have an incredible advantage: agility.
With the right support, mindset, and systems, you can pivot quickly and scale with confidence.

Want help avoiding these mistakes in your business?
Let’s talk. I offer strategy sessions for small business owners looking to build smarter, lead better, and grow faster.
If you don’t think you have the time or money to warrant having a business coach, then think again. I have numerous case studies where the clients I have worked with have been able to cover the coaching fees through savings we identified in the first session.

Also, I offer a money-back guarantee if you don’t think you are getting value from the sessions.