Many business owners often ask themselves how much faster they may have been able to achieve their success if they had only been better prepared and more aware of the business mistakes they were making without realising. In this article, we highlight (in no particular order) our top 5 business mistakes that your business could already be making and the steps you can take to avoid them.
1. Failing to plan
Some smart Alec once came up with a little ditty that goes along the lines of “fail to plan and you plan to fail.” Whilst we have no idea where this little gem of wisdom originated, it does (as these things so often prove) have a certain logical ring of truth about it.
While it can be quite exhilarating for you as a business owner to experience early successes and to see cash flowing into your bank account, there is plenty that can go wrong. Investing some time in seeking helpful advice and formulating a business plan or at least an outline strategy will help you to avoid losing your way. This often happens when the business landscape changes or business owners come up against unanticipated problems.
2. Underfunding the business
Even for businesses that have invested time and effort into planning, underfunding or undercapitalisation as it is also known, can creep up on them. This often happens to newer businesses that are experiencing a surge in sales and everything is looking rosy. That is until they attempt to’ramp up’ inventory, manufacturing, or the resources they need to provide their services to an expanding customer base.
It is at this point that the cash coming into the business is then unable to keep pace with the investment needed to keep the supply chain flowing. Borrowing money from banks and investors takes time to organise and the interest rates that such funds bring with them have an uncanny habit of knocking the stuffing out of your previously healthy profit margins.
By making sure that your follow our next tip about scalability, you will also ensure that you have a tighter and better-informed handle on the funding of your business.
3. Failing to understand the principle of scalability
The very real ‘knock on’ effect of messing up on numbers one and two is that your business will either flounder through lack of planning or become starved of cash through expanding quicker than you are able to fund that growth.
This leads directly to problem number three which is a lack of scalability. From having the manpower and funds to the technology and systems that can grow with your business, they are all major considerations of scalability.
In some ways, there is a very real danger of your business becoming a victim of its own success and this often happens in the absence of scalability. Through planning for and scaling growth in a controlled way, your business can ensure that capital, resources, and technologies are able to keep pace with the business and expand with it as it grows.
4. Ignoring the competition
Whether you have chosen to make it your business to discover everything you can about your competitor’s businesses or not, you can be assured of one thing; they are already making it their business to know all about yours.
It is surprising just how many business owners get their ‘heads down’ and bury themselves so deeply in their own businesses that they fail to seize the opportunities available through learning from the competition.
By putting yourself in their shoes, you will not only be able to see how the competition views your business but you are also highly likely to see it in a new and fresh way too.
5. Failing to move forward
Moving forward in business, planning, improving on your competition, and sustaining scalable growth are all important factors, however, in many cases, the total reverse can happen. Even in today’s fast-paced business world, there are business owners who believe they can operate on the traditional Mom and Pop principle.
The sometimes harsh reality is that there are really only two types of businesses; those that are growing and those that are shrinking.
There is no room for standing still in business and if you don’t seize the opportunities you can rest assured that your competitors will.