How To Overcome Eight Small Business Mistakes
Here's an interesting notion: Do you realize that there are mistakes you can make
at a number of stages of your business' growth that can be slowly killing it for months or often years if you don't be on the lookout for them?Well, these mistakes do exist and they're not just reserved for the rookie companies. Many working businesses, including those you could think are successful because they've been around for 10+ years, are oftentimes still making them... and are possibly losing a fortune and/or wasting a lot of time along the way.
Although some of these big and sneaky mistakes seem aimed more at service type businesses, they really do fit the bill for almost any sort of industry. I've done my best with the listings below to give examples to prove it.
Underestimating Project/Service Time- This is a big one and it concerns service businesses along with businesses that sell a product. This is a service company's bread and butter. If you don't estimate your time to perform each and every service in your repertoire, you have access to burned and there is little you can do about it but bite the bullet and study from it. The best method to estimate time is to do it once yourself or watch your best staff member do the chore and then throw in a little fudge factor on top of it. For product businesses, time becomes a problem with logistics so be conscious!
Not Knowing YOUR Company Numbers/Incorrectly Setting Prices- Notice I emphasized the expression your. It's a common mistake to make use of a competitor's as your pricing gauge without actually knowing why they use those numbers. Consider the nightmare you have access to yourself into if you take a competitor's price, cut it by 10% and then start selling. What if the competition has a bad pricing structure and is barely making money or even losing money?!?! What if your expenses are more than theirs?!?! You can utilize competitor as a starting position but you can't base your whole strategy on it.
Different industries have their own variables as far as costs go and you have to be mindful of them for your task or product pricing. What you pay for a product you are going to trade isn't the only cost to have in your head when you are pricing products. How much your labor and materials cost for a service is simply a piece of an hourly rate. Staff members cost more than simply salary and not every employee is part of your labor cost. Every company has insurance to pay for. There are tons of overhead expenditures that need to share in your price. Oh, by the way, the big one that many people forget about in their price is the quality factor. What you include as regular facilities or standard product features along with job site etiquette or in shop service or warranties all need to walk into your pricing. I'll get to more on why in the next segment.
Not Charging for All of Your Time & Costs- This seems like a stupid statement to some but I bet most business people will admit that they have given away a little too much of the farm every now and then. Hey, there is nothing wrong with giving a little extra here and there to show you care. But one way or the other, that's not what I'm talking about here. What concerns me are those that put a lot of quality into their work or products or stores and do not cover the cost for it. As an instance, say you run a hosting company and your rivals don't do a particular standard service that you do. You cannot just undercut their price to steal a job; you need to have that cost covered in your rate and advertise the fact that it arrives with the cost upfront. Stores undermine themselves, as an example, when they put lots more people on the floor for client service but don't charge for it. These things cost you money and when your rivals don't do them it costs them less money. Put out better service and below price them, and your competitors just has to wait a little bit for you to fall on your face so they can swoop back in.
As a company owner you should think that you are providing your customers worthwhile wares that merit being paid for. If you get the opportunity to explain why your prices are higher, then take that opportunity and do it. If they do not like the fact that you include items that others charge extra for later or that you treat them better, then they're most likely completely price shoppers. You wouldn't like them as regular customers anyway. Trust me.
Not Getting Paid Fast Enough- That's right, the old fiscal issue. As long as you are actually making enough money to settle the bills, this issue may be solved, prevented or at the very least made to be not as bad as it could be. Here's the deal:
First of all all, bill customers very promptly. It is very common for a small to medium size business to not have the procedures or systems in place to get invoices generated and out the door in a timely fashion (see the next segment for more). Again, this would seem unlikely since that's the excuse why we're doing the work- to get paid. But it is very easy for the people answerable for getting this info to the billing people to be too busy to acquire it there or not have adequate establishment to give it to them the right way.
The second part to slowing 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 any way not to pay employees any more than twice a month, you better do it. Contractors always have a problem with this. If you should pay weekly, then tell them prior to them being hired that they will be receiving the first week held back, essentially buying you a week. It will help, I promise.
Part three involves credit. If your company can get a charge card, then get it. This permits certain important matters to be bought (that are able to afford) that may come up during a cash flow crunch. Better yet, in particular when you have no alternative but to deal with 45+ day customer payments, do your best to get a business line of credit. This is a must if you are planning on selling to the government or doing commercial service work. These clients frequently have 60 to 90 day wait periods.
Failure to Have Solid Systems and Procedures in Place- Too many procedures ( referred to as red tape) is the reason that why lots of people start their own business in the first place. Unfortunately, having no procedures and systems in place at all is not a choice. Dependent on the sort of industry, business people must come to a happy medium or chaos and the unknown will ensue. Some rudimentary examples where procedures or systems are needed include billing, collections, payroll, hr (interviewing, hiring, vacations, benefits, job responsibilities, etc.), manufacturing, operating equipment, maintaining equipment, inventory, sales calls/visits and logistics to name a couple of.
Even a one person show needs to have some admin procedures in place. This will make it easier to hire temps and subcontractors and control what they're doing for you. Without at least a watered down version of a system or procedure to do everyday work, you will be responsible for causing many major headaches as your company grows. I can't emphasize how important this is for when you bring about new employees. I'm sure you discovered this before, but I am also a big proponent of having an employee handbook even for one staff member. It's amazing the trouble people can lead to business owners just as they allow you to pay them.
Spending Advertising Money Just to Say You Advertise- I would almost rather see my customers not advertise then to spend without regard to tracking the results. There is no point in a campaign if you don't put things in place that allow you to measure how well the program 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 believe that just because a $400 dollar a month ad worked once very well for one busy season, that it will automatically work each year after that is beyond me.
Spreading Yourself Too Thin- This is a classic mistake made by every entrepreneur. The cornerstone is to figure out when you are at that wearing too many hats point and start getting some aid. The solution here is to know your strengths and to be able see when you are not performing the duties that requirement these skills. If your the best sales person on the business, you have access to involved in daily operations. If you do, sales will slip and in the end you won't have any operations to worry about. Think about this to help you figure out if your spread too thin: Did you actually enter business for yourself to work 80+ hours a week?
Not Getting Help Soon Enough- Set goals to know when to hire people to rule where you are light on knowledge. Not getting help or waiting long can kill a business. Most individuals who start a business do it since they're accomplished at the technical end or the sales end. If you know the best way to create a widget, then your strength is in production and that is where your time ought to be spent. Hire an outside company or consultant to look after the sales and marketing and then hire inside when are able to afford someone full time. Don't be something to your company that you aren't. It will only hold you back.
The three big issues people like to tackle themselves but usually are least knowledgeable about are legal issues, accounting/bookkeeping issues and daily operations issues. The odds are that these three things are your weakest link so if you do not have a partner that has the backdrop for these subjects, then be ready to get help as soon as possible. It's preferable that you do this before you start a business.
Although looking for these complaints at any time is a good idea, the end of a year or season is a fantastic business interval to make certain you aren't making these errors. Spend a while, or make the time, to fix these issues. If you do not recognize how to reverse the problems, then get some help. If you really don't have enough time to either figure out if you have these problems or know they're there and can't become independent from of sufficient length to do it right, then get some help.
by: Abraham Itunnu Sell Your Gold For Some Quick Cash Advice And Tips For Doing Business With The Government How To Make Unique Business Card Templates Make Your Own Print Business Cards Google Voice As A Competitor In The Business Voip Market Business Factors - Look For Ar And Increase The Profit San Diego Phone Systems Can Give Your Small Business The Perfect Edge Immediate Cash Loan For Small Business Immediate Cash Loan To Business Small Business - Improve Company Cash Flow Know Details - No Checking Account Cash Advance And No Credit Check Cash Loan Invest In Romania With Business Broker Know More About Small Business Start Loan