10 Common Mistakes Small Businesses Make (2025 Updated)

Contents

Having your own small business has some fantastic benefits. You get to be your own boss, set your own hours and enjoy creative freedom – the world is truly your oyster in 2025!

However, running a small business can be overwhelming at times.

In the rush of wanting your business to thrive, it’s very easy for certain details to slip under the radar.

While there isn’t a one-size-fits-all business plan, here are 10 common mistakes to avoid so your business can run more smoothly and be fully compliant with today’s legal requirements.

1. Rushing

In the excitement of launching your business, you may feel pressured to speed through tasks. There’s an urge to see rapid progress, and spending time to research or plan can seem like a delay.

This might mean skimping on detailed market research or hastily entering agreements with vendors.

Solution: Remember that taking a considered approach is not procrastination – it’s about making smart decisions. In 2025, with ever-evolving market trends, a well-informed and paced approach ensures every decision is best suited to you and your business. Consider reading our guide on why business structure matters to help set the right pace from the start.

2. Doing It All By Yourself

Many small businesses start as one-person operations. Kudos if this describes you! Over time, however, handling every single task by yourself can become overwhelming.

Managing every aspect of the business increases the risk of errors and missed opportunities, which could cost you more down the line.

Solution: Consider seeking professional advice – whether it’s consulting an accountant for your finances or a lawyer to ensure your business legals are in order. For ongoing support, you might even benefit from a legal subscription service that stays updated with the latest regulatory changes.

3. Not Choosing The Right Business Structure

When planning your business’s product or service, determining the correct structure may not be at the forefront of your mind. However, this is crucial.

In New Zealand, the main options remain as sole trader, partnership or company. Each option has distinct advantages and risks – consider whether you’re prepared for personal liability or if you’d prefer the separation of personal and business assets.

Solution: Choose the structure that best fits your specific circumstances in 2025. If you’re unsure, why not ask our team for professional advice? You might also benefit from our insights on sole trader vs company considerations.

4. Jumping Into A Partnership

It can be tempting to join forces with a friend, significant other, or family member as a business partner – especially when working alone feels daunting. While sharing the journey can be rewarding, it’s important to proceed with caution.

Personal and business relationships are not always compatible; balancing both spheres can be challenging.

Solution: Ensure you and your partner not only get along but also bring complementary skills to support the business. It’s essential to clarify your partner’s level of investment and commitment. For more guidance, check out our tips on choosing the right business partner.

5. Not Putting Agreements In Writing

Sometimes, partners may skip the formalities of documenting the details of their partnership because their personal rapport feels unbreakable. It might seem overly serious to document everything.

But without written agreements, what happens if the business encounters difficulties or if either party wants to exit? How will profits be divided or responsibilities managed?

Solution: It is crucial to draft a comprehensive Partnership Agreement or a Founders Agreement that clearly details how your partnership will operate. If your business is set up as a company, don’t forget to secure a Shareholders Agreement to protect all parties involved.

6. Failing to Protect Intellectual Property

Your Intellectual Property (IP) encompasses your designs, brand, ideas and other intangible assets – the core of your business. In today’s competitive market, protecting your IP is more vital than ever.

If you don’t secure your IP, others may copy your successful ideas, putting your business at risk. Updated legal measures in 2025 provide better avenues for protection, but the responsibility still lies with you.

Solution: Consider registering for a patent or applying for a trademark to safeguard your brand. Additionally, using a mutual non-disclosure agreement when discussing confidential ideas can provide further protection.

7. Hiring People Incorrectly

As your business grows, you might decide to bring employees on board. However, the excitement to hire can sometimes lead to overlooking the proper employment procedures.

Solution: In 2025, ensure your employment contracts are robust and cover all essential areas including pay, role classification, confidentiality, and termination procedures. This proactive approach helps protect both your business and your new hires.

8. Not Separating Personal And Business Accounts

At the early stages of your business, it might seem unnecessary to set up separate bank accounts, particularly when profits are still slim. But mixing personal and business funds can lead to a tangled web of expenses.

Tracking your financial flow becomes much more complicated, and come tax time, the headache is all yours.

Solution: Even if a dedicated business account feels overwhelming initially, establishing a separate checking account solely for business transactions is essential. In the long run, consider hiring an accountant to help manage your finances effectively, especially with the increasing regulatory changes in 2025.

9. Not Using Social Media To Your Advantage

Social media remains a powerful, often free, marketing tool for small businesses in 2025. Platforms like Facebook, Instagram and LinkedIn are essential for building your online presence, reaching new customers and generating additional revenue.

Solution: Leverage social media to its fullest potential. Start by establishing your brand on free platforms, and consider drafting an Influencer Agreement if you work with content creators. Building a strong digital presence can significantly enhance your business growth.

10. Don’t Forget Why You Started

Running your own business comes with both the highs and the lows. With challenges arising, it’s all too easy to lose sight of your original passion, be it a lifelong dream, a calling or simply the thrill of the hustle.

Solution: Reflect regularly on your vision and the reasons why you embarked on this journey. In the ever-changing landscape of 2025, learning to manage stress and appreciate the small wins is a key skill. Remember to allocate time for yourself, maintain a healthy work-life balance, and revisit the inspiration that fuels your business every day.

Final Tip: Stay Current With Your Legals

In a regulatory environment that evolves as rapidly as the business world does, staying updated with your legals is crucial. Consider scheduling regular reviews with our expert team to ensure your contracts, employment policies and compliance measures are always up to date. For instance, our resources on legal essentials for starting a small business and business structure can provide ongoing support as you grow.

Good Luck!

If you need any help with your small business legals, please reach out to us on 0800 002 184 or email [email protected] for a free, no-obligation chat about your needs in 2025 and beyond!

Sharon Choi

Sharon is the Social Media & Creative Coordinator at Sprintlaw. She has completed her law degree at UNSW and has experience working in law firms and in social media marketing.

Do you need legal help?
Get in touch now!

We'll get back to you within 1 business day.