It is so exciting running your own business. When you first start up, you have dreams of making the big time. But as time goes on, you may discover that although you have the passion, the energy runs out quickly when each day provides the next challenge.
Don’t let these common mistakes keep you down. Avoid them, and get your business back on track.
Failing to plan
The saying is true: If you fail to plan, you plan to fail. This is a big problem for many small businesses. If you don’t have goals and specific plans on how to get the business where it needs to be, you will be distracted by every detour along the road and your business may end up nowhere near the ultimate destination. Spend a day at the beginning of each year setting out your goals and plans — it doesn’t have to be pages long. In fact, try to put your goals on one page and pin it above your desk so you can refer to it regularly.
Not understanding cash flow
Remember, cash is king. Every business fails when they run out of cash. Most business owners focus on sales and profits, but cash flow is critical to the success of your business. Many profitable business still struggle with cash flow. You need to understand the difference between profit and cash, and focus on ensuring you have adequate reserves to cover the unexpected.
Believing “build it and they will come”
Don’t listen to those who say, “build it and they will come.” Of course we believe in our product or service offer to customers. Just because we feel that we have the answer to the customers’ problems does not necessarily mean they are aware of their problem — or know you have the solution. It takes more than simply opening business to guarantee sales will happen. You need to stay on your marketing toes at all times to keep a steady stream of customers visiting your business.
Putting garbage in — and expecting to understand it later
If you put garbage in, you will get garbage out. Many small businesses use spreadsheets to keep their financial, customer and key business records. Although this might suffice at the beginning, once the business is up and running, you need specialist software that will ensure all the information you record is correct and accurate. Spreadsheets are prone to errors. There are no built-in controls over the information entered, and spreadsheets will not provide critical information in a decision-making format without an enormous amount of time and effort. Use tools that are designed for record keeping and deliver reports and key performance measures on demand — it will make your life easier and improve your business.
Being a jack-of-all-trades
One of the most common issues for business owners is time, or lack thereof. Running a small business means you have to be the marketer, sales representative, product development expert, finance manager and another half-dozen different roles. This usually means that we get easily distracted from one task to another without completing any with finesse. It takes real discipline to complete each job and do it well. Evaluate where you spend your time and effort. If it is better spent working towards your primary business goals, consider outsourcing some tasks.
The biggest mistake that small business owners make is not treating their business as a business. It is a real job and should be run the same as big business — just on a smaller scale.