9 Big Mistakes Business Owners Make
Everyone makes mistakes, but here are 9 of the most common mistakes business owners make which negatively affect their businesses
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Are you making any of them? The first step is to admit if you are making one, then start taking action to rectify it so you can improve the situation in your business.
1) A lack of planning
You probably all have business goals, but do you have the detailed plan to reach those goals? When you have a vision and a plan you can check it regularly to ask yourself is what we are doing supporting our plan and our goals?. Plan out at least 6 months ahead include for e.g. what products youll introduce, what marketing youll do, how much money you intend to bring in etc. If you fail to plan, you plan to fail.
2). Not measuring your business operations
You can only manage what you measure. If you dont know what is happening in your business it is very difficult to pinpoint the areas to improve. You may just carry on as normal, unaware that certain areas of your business need attention or have great possibilities. Measuring key performance indicators will give you the information you need to make improvements to your business, being left in the dark could be costing you money or lost potential.
3). Assuming you have no competition
Even if you have the latest, greatest, never-been-done-before approach to something, don't assume that you have no competition. Competition is more than just the direct, obvious competitors. Competition is also all the available alternatives. What else could the consumer do instead of using your product or service? Could they do nothing? The customer almost always has the option of walking away. That alone is a serious competitive threat.
4). Not Knowing Your Audience
Understanding the consumer base that youre trying to appeal to is a key pillar of success. Simply having a product or service isnt enough. Whether youre selling shoes or youve got a vending business you have to know who your target audience is and what theyre interested in.
5). Ignoring your website
Like every part of your business, if you ignore it, its not going to help you and it will seldom get you any sales or leads. Nowadays so much of the buying decision is made before the customer even makes contact with the service/ product provider that your online presence has become more important than ever. Small businesses need to interact with consumers, offer a portal to receive information, add regular content via social media channels, build links and otherwise get involved in marketing their businesses online so they can use it as a successful tool for lead generation. If you are not receiving leads via your website then you are probably doing something wrong.
6.) Not marketing
One of the first expenses that get slashed during tough times is the advertising/marketing budget. You need to be very careful in this area. It is the marketing that drives the revenue in many companies. Instead, what you should be doing is measuring the effectiveness of your marketing and making sure that your resources are wisely invested in the right marketing vehicle to reach your target market. At a minimum you should have a simple marketing plan, a marketing budget and a way to measure the effectiveness. Expecting that your market will find you is a quick path towards going out of business.
7) Poor cash flow management
Business owners often confuse profit with cash flow. As the old saying goes, "profit is what you pay taxes on, but cash is what you put in the bank."
It is important to understand how cash cycles through your business and the "holes" it can get stuck in. Every business owner should be managing their receivables, inventory and payables. In other words, when it comes to cash, timing is everything.
8). Trying to do It all
A great mistake is to believe you can do it all by yourselves. Just like any other person, you have your natural talents and other areas where you are not so strong. As a business owner, it is your job to identify those talents and focus on them to your fullest. Surround yourself with people who are strong where your talents are weakest. This can be done in two effective forms: i) outsourcing to specific service providers or ii) employing and delegating effectively. Both are effective and you may need to use a mix of both techniques. Taking on an extra pair of hands will increase your costs but you will be surprised at how much time will be saved allowing you to do what you do best. If you have a viable product or service, then it is important that you focus on that, as it will be more profitable than working on areas which arent your skills. Great companies are built on the foundation of exploiting a few strengths, not on trying to be masters of everything.
9). Forgetting why you're doing this
Sometimes, in the stress and struggle of running a business, you forget why you started it in the first place. You forget that you were looking for an opportunity to control your time and own your destiny. But you must hold on to those dreams and pursue them passionately. Because a common thread I've seen running through the lives of successful people is that they have a reason for doing what they do--a personal and powerful reason that pushes them to be successful.
Fortunately, all these mistakes can be easily solved if you decide to focus on them. So the first step is to admit if you are making one, then start taking action to rectify it so you can experience the improvement in your business.
What other mistakes do you think business owners often make?
Edward Hamilton is a Barcelona Business coach working with small and medium sized local businesses. You can read more information about the benefits of coaching and how it works by visiting Green Bean Business Coaching
by: Ed Hamilton
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