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Trying to grow a small business is hard work, and, in our efforts, we often forget about the other challenge – avoiding mistakes. In this article, we’ll explore some of the more common pitfalls for small businesses and help you to create the habits to avoid them.
Lack of Direction
When you have a strong idea and a lot of excitement, it can be tempting to run your business adaptively (without any clear roadmap). The truth is, this is a recipe for disaster as the direction of the company, the attribution of its resources, and the function of your team become increasingly unclear over time. To avoid this outcome, it’s crucial that you write an airtight business plan detailing exactly how you’ll approach sales and marketing, what you require budgetary, and how your resources will be spent over time.
Bad Hires
Nothing sinks a business faster than a few bad hires. Especially in the early stages, each new member of the team represents a much larger percentage of overall work output than they might in a larger corporation, and, therefore, it’s crucial that you bring in smart, industrious individuals who you know will contribute in a meaningful way. You can avoid bad hires by vetting candidates during the hiring process and prioritizing proven experience over more irrelevant variables such as age, appearance, and social demeanor.
Budget Deviation
Your budget exists for a reason. If you’ve painstakingly laid out projected expenses, revenue figures, subscription costs, and more, it’s crucial that you remain cognizant of these at all times. That means paying attention to your quarterly profits and adjusting your outgoings accordingly. It also means resisting the temptation to spend unnecessarily on entertainment, software upgrades, or trivial costs (such as PPC marketing adjustments, permit/license renewals, utility bills, etc.) – these can add up over time. Accounting apps can help you to keep track of and alert you to any deviation from the budget.
Distrust of Technology
Business owners who try to veer from the use of tech in this current economy are likely to pay the price for it. The right software can help you to work faster and smarter and reduce the risk of any slip-ups. Inventory management software, project management platforms, cybersecurity protections, and more can help level up your business and save you money in the process.
Lack of Expertise
It’s surprisingly common for entrepreneurs to jump into business management without reliable expertise – this poses a risk to your personal capital and the business itself. Before undertaking a venture, it’s often a good idea to first study and get a business bachelor’s degree. Whether you specialize in accounting, business communications, or management, the skills you pick up in an accredited course will help you to succeed in the market itself. Better still, online degree programs can be completed remotely, meaning you can fit studies around your entrepreneurial schedule.
Poor Cash Flow
Cash is important for a small business. If you want to meet the growing demands of your customers, maintain your existing infrastructure, and avoid having to take out a loan, you need your clients to pay on time, and you need fast-flowing working capital. To help with this, introduce some invoicing processes, offer multiple payment solutions and maybe consider diversifying your portfolio to include smaller, more affordable products.
The business world is fraught with hazards, and it’s only with a diligent approach that you’ll be able to avoid the mistakes that so commonly sink promising ventures. Start by thinking about the pointers above and see if you can think of some others that might be relevant to your particular circumstances – prior thought is often the key to avoidance.
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Article written by Ian Garza
