Do you realise that there are mistakes at various stages of your business’ growth that can be slowly killing it for months or even years if you don’t watch for them? Many working businesses, including those you might think, are “successful” because they’ve been around for 10+ years, are often still making them and are possibly losing a lot of money and/or wasting a lot of time in the process.
Although some of these big and sneaky mistakes, they really do fit the bill for almost any type of industry. Below to give examples to prove it.
Underestimating Project/Service Time.
This is a big one and it pertains to product and service companies. If you don’t estimate your time to perform each and every service in your repertoire, you will get burned and there is little you can do about it. The best way to estimate time is to do it once yourself or watch your best employee do the task and then throw in a little fudge factor on top of it. For product companies, time becomes an issue with logistics so be aware!
Not Charging for All of Your Time & Costs
This seems like a stupid statement to some but I bet most business owners will admit that they have given away a little too much of the farm at times. Hey, there is nothing wrong with giving a little extra here and there to show you care. What concerns are those that put a lot of quality into their work or products or stores and do not cover the cost of it.
You run a service company and your competitors don’t do a certain standard service that you do. You can’t just undercut their price to steal a job; you need to have that cost covered in your rate and advertise the fact that it comes with the price upfront.
As a business owner, you need to believe that you are providing your client's worthwhile wares that deserve to be paid for. If you get the chance to explain why your prices are higher, then take that opportunity and do it. If they don’t like the fact that you include things that others charge extra for later or that you treat them better, then they are most likely completely price shoppers. You don’t want them as regular customers anyway.
Not Getting Paid Fast Enough
That’s right, the old cash flow issue. As long as you are actually making enough money to pay the bills, this problem can be solved, prevented or at least made to be not as bad as it could be. Here’s the deal:
First, all, bill customers very promptly. It is very common for a small business to not have the procedures or systems in place to get invoices generated and out the door in a timely fashion.
The second part of slowing down or stopping a regular cash flow crunch is to make the quickest payment deals possible with customers and the slowest possible with vendors and employees. If there is anyway not to pay employees any more than twice a month, you better do it.
Part three involves credit. If your company can get a credit card, then get it. This allows for certain important things to be bought that might come up during a cash flow crunch. Better yet, especially if you have no choice but to deal with 45+ day customer payments, do your best to get a company line of credit.
Failure to Have Solid Systems and Procedures in Place
Having no procedures and systems in place at all is not an alternative. Depending on the type of industry, business owners must come to a happy medium or chaos and the unknown will ensue.
Spending Advertising Money Just to Say You Advertise
I would almost rather see my clients not advertise then to spend without regard to tracking the results. There is no point in a marketing campaign if you do not put things in place that allow you to measure how well the plan is working.
The other wasteful part of marketing that many people make the mistake of doing, is not tracking their previously successful campaigns. Why some people think that just because a $400 dollar a month ad worked once very well for one busy season, that it will automatically work every year after that is beyond me.
Spreading Yourself Too Thin
This is a classic mistake made by every entrepreneur. The key is to figure out when you are at that “wearing too many hats” point and start getting some help. The solution here is to know your strengths and to be able to see when you are not performing the duties that demand these skills. If you are the best salesperson in the company, you can’t get caught up in day-to-day operations.
Not Getting Help Soon Enough
Set goals to know when to hire people to take over where you are light on knowledge. Not getting help or waiting too long can kill a company. Most people who start a business do it because they are good at the technical end or the sales end. If you know the best way to make a widget, then your strength is in production and that is where your time should be spent.
Hire an outside company or consultant to take care of the sales and marketing and then hire inside when you can afford someone full time. Don’t be something to your company that you are not. It will only hold you back.