Here are the best business tips that will help you avoid common small business mistakes that owners tend to make. Let’s face it, very few start up businesses make it beyond their second or third year.
Failure is usually due to some clearly identifiable mistakes. Being aware of these at the outset or even later during the growth phase of a small business can increase chances of survival.
Lack of Market Research
When an entrepreneur comes up with an idea for a new business he assumes that because he would buy such a product or service then everyone else will. This may be the case for day-to-day necessities but for other items this is usually not so.
It’s important that when you start up you carefully research the market to check that:
- There is demand at a level which would lead to a sustainable business
- People are prepared to pay the price required for you to make a decent profit
Undertaking market research may appear time consuming but the effort will pay off. Of course, you may not be able to conduct this research with the rigor that it requires. GET ASSISTANCE HERE
Insufficient Capital and Cash Flow
When starting off it is easy to determine the capital required for fixtures, fittings, machinery, tools and inventory.
What many new business owners forget about is the cash needed to fund day-to-day requirements – cash for expenses before your customers pay you. This is known as your working capital requirement.
Small businesses can fail because they have insufficient cash to start off to meet these immediate expenses. To survive make sure you set aside enough cash to meet all your needs for the first few months,
This is because it is very easy for your cash flow to quickly dry up! Bank rolling on credit should not be your option, most especially at the current interest rates!!
Poor Record Keeping
Some business people are not born administrators. They are more comfortable being hands on in other areas of the business. Paperwork is too easy to ignore but cannot be put off indefinitely as it will come back to bite you during tax preparation by your accountant!
Sales, purchases and other expenditure must be carefully documented, so you know whether you are making a profit or not. Invoices must be issued on time and chased up promptly if there is a delay in payment. It’s all very well having the sales but poor record keeping can hold you back.
Ineffective Marketing Or None At All
You cannot afford to treat the cost of marketing as an unnecessary expense. A business with no marketing is like waving in the dark – you know you are doing it but no one else does!
There are many ways to promote your business on a small budget. Just being inventive and creative helps. What are your competitors doing? If you do not know, find out.
Good Examples
These include having a company website, flyers or brochures, networking, social media, and even referrals. If your business is not making money, it is unreasonable to invest in paid social media Ads as this is quite expensive for it to be effective.
What ever you do, don’t assume that people will quickly know you are in business – they will not, unless you tell them!
Ignoring Changes In The Market Place
As a small business owner it is easy to get immersed in your business and not see what is happening around you in the market place.
Always keep your eyes and ears open to what the competition is doing and what your customers want. Do not get left behind.
Trying To Do Everything and Not Delegating
The major problem most small business owners have is the fact that everything falls on their plate. Inevitably this is how it is likely to be in the beginning, when a limited budget means that staff are a luxury, but as the business grows be aware that you cannot continue to do all tasks.
The Best Business Tips to Eliminate Owner Doing Everything
A time will come when inefficiency creeps in and you not have enough time to complete everything to sufficient quality and detail.
Taking on an extra pair of hands will certainly increase your costs but you will be surprised at how much time will be saved, allowing you to focus on other more important areas of the business.
Owner Overwhelm and Stress
Trying to do too much as as a business owner, especially if you are not very organized and have poor time management skills is a recipe for overwhelm and stress.
Creating business systems and processes can help get rid of a lot of business chaos while learning simple time management techniques will ensure that you get more done efficiently.
Spending Money On The Wrong Things
As the business grows and revenue increases, do not be tempted to splurge on non-essential items. If you want to remain in business then you have to keep some cash back to fund future growth.
A business cannot grow without cash, so commit to spending business money on the business and learn to prioritize your business needs (actual) versus wants (desires) .
Depending On A Small Number Of Customers
Do not fall into the trap of setting up a business just because one person says they will buy from you every week or month. Setting up and running a business, which is dependent on one customer, is not a recipe for success.
What happens if, one month after you have spent all your cash to set up your business, that customer says he has changed his mind and has decided to buy elsewhere? Unless you can find other customers very quickly you are faced with closure.
Having a small pool of customers is good, but you must be consistently filling your sales funnel in case of the loss of any one of them.
Before embarking on a new venture make sure you have a sufficient number of customers such that if a few go elsewhere you can still continue trading.
Taking On More Work Than You Can Handle
Surprisingly, growing too quickly can be a problem. You have to be disciplined enough to only take on work you can handle.
If you are tempted to accept too much you could end up disappointing not only the new client but also your existing ones. Do not forget about overwhelm and tress!
Also, do not under-estimate the impact rapid growth can have your administrative burden. Falling behind on the paperwork can have an equally damaging effect on your business.
Not Seeking Assistance When Stuck – The Best Business Advice
This is a common mistake made by many small business owners. Getting stuck or experiencing problems in any area of your business will happen. You can choose to fix these if possible in a short timeframe by always seeking assistance if you do not know how to do so. CONTACT US NOW
Conclusion – The Best Business Tips
Reviewing the best business tips to avoid common small business mistakes will ensure that you do not fall into these traps.
References
Lotich, P. (2019). The Importance of Systems and Processes in Small Business. The Balance Small Business. https://www.thebalancesmb.com/the-importance-of-systems-and-processes-in-small-business-2951534
Hecht, J. (2019). Streamlining Small Business Processes: How to Create Efficient Systems. Fundera. https://www.fundera.com/blog/streamlining-small-business-processes
Singh, R. (2021). 5 Key Business Processes You Should Automate in 2021. Entrepreneur. https://www.entrepreneur.com/article/365872
Conrad, A. (2021). The 7 Best Business Process Management (BPM) Software Tools for Small Businesses in 2021. The Blueprint. https://www.fool.com/the-blueprint/bpm-software-for-small-businesses/
