6 Common Mistakes That Small Business Owners Make
Mistakes That Small Businesses Make
Starting a small business is anything but easy, and if you have ever tried to start your own, chances are that you will agree with that statement. However, experience and study tends to show that many people repeat the same mistakes when starting their own small business. Some of these mistakes are avoidable, and some are not. However, you will be in good shape simply by knowing the different possible mistakes that are out there, and the way, if any, that you can avoid these pitfalls. Of course, this is not an exhaustive list, but some things to keep in mind as you grow your business ever larger.
Do not ignore marketing when you are busy
When things really get moving in your business and you’re grinding out the latest and greatest ideas that are going to help you grow, you might have a tendency to forget some of the more basic aspects of your company: MARKETING IT. People need to know about your product and will not be able to take advantage of your company unless they somehow know about it. If you spend all of your time working on research, development, or other non-marketing aspects of your company, and then suddenly remember that you need to also market your products, you may be too late or, at best, may have missed some great windows of opportunity for your business.
Do not underestimate the importance of cash flow
Small business owners can sometimes have a problem seeing the forest from the trees. They can get hung up on certain financial details that, while important, will not tell you the whole picture of your financial situation. A very important example of this phenomenon is the tendency for small business owners to ignore their cash flow. Instead of focusing on your daily level of cash, some business owners look more broadly at costs and profits. Ignoring your cash flow for too long can be disastrous, as it could leave you unprepared for situations in which a large amount of cash will be necessary.
Be sure to have a strategic plan for several years out
This is a common aspect of owning a small business that business owners ignore or underplay. It is extremely important to forge a strategic plan for your company when you start. It is only through the lens of your strategic plan that you will be able to accurately assess whether or not your company is succeeding on its own terms. Without looking at this plan, it becomes much harder to accurately determine whether or not this is the case. Along these lines, determining whether or not your company is “successful” is absolutely crucial in determining where that plan goes, how it is revised, and so on. If you do not have an idea of whether you are succeeding, you also will not have a better direction in which to take the company.
Look after the pennies, and the dollars will take care of themselves
Many small business owners also overlook the extremely important necessity of having a budget for their operations. This budget will attempt to take into account all of the very low costs that might not seem like important enough to account for. However, as the quote for this section makes clear, it is only through the small unit of measure that larger units of measure are comprised. If you spend a great deal of time making sure that your small units are in order, then you will not have to worry about whether or not the larger ones are adequate. In short, death by a thousand cuts is a very common reason that small businesses fail.
Mismanaging customer expectations
Your customers, after your employees, are basically the most important group of people for your small business. To stay successful, you need a robust system in place to measure their levels of satisfaction. There are many different ways to do this and this article does not have the time to go into detail about these methods. However, suffice it to say that you will have to have some mechanism that takes into account customer feedback. If you are successful at managing and responding to the expectations of your customers, then you will be better positioned to better predict their needs in the future6.
Resting on your laurels
Ironically, one of the easiest ways for a business to fail is by early success and contentment. If you rest on your laurels after achieving early (and perhaps unexpected) success, then you will not have the same drive and energy that will be required to achieve the next level of success. Meanwhile, other individuals might see opportunities that you are missing and will take advantage of them, leaving you behind.
These are just some of the several common mistakes that small businesses make. If you stay aware of these mistakes, you will be better positioned to avoid them with your small business. Best of luck out there!
This post written by Steve Bronson in association with Brahman Systems, makers of an innovative cable protector.