5 Mistakes Even Successful Small Business Owners Have Made

5 mistakes

If you have been in business for a few years, you will have made these mistakes at some point. When we build our business, grow our business, or implement any significant change, we are vulnerable to missing, avoiding, and neglecting steps we should have taken. Here are 5 common mistakes you do not want to make when going through a transition.

1. Neglecting Financial Management

This is not just looking at your taxes, or monthly bookkeeping, it is being able to look at your numbers and know you are on track.

  • Have a one-year cash-flow projection that you can evaluate your income and spending as you go through the year.
  • Know your monthly income and expenses. Your bookkeeper should be able to give you a Profit and Loss (P&L) statement each time they reconcile your books. If your bookkeeper does this every 3 or 6 months, then don’t wait to get the P&L from them, use your cash-flow projection sheet, or other online software, to also keep track of your actual numbers. Ask your bookkeeper or accountant if they have software they use to do this. This is a great way to compare where you thought you would be and where you are, which helps take the guesswork out of future decisions.
  • Ensure you are putting away money to pay your taxes at the end of the year. It is great to have a successful year with a great profit, but it is disheartening when you are required to put out a large sum of money for taxes, that you were not expecting. You can find your corporate tax rates here. If you are a sole proprietor, you can find your personal tax rates here for Provincial and Federal tax amounts.

2. Neglecting Marketing

It is not enough to know you have an incredible product or service that many people will want and need. It is not enough because if people don’t know about it, it will not sell. You MUST do marketing. Free social media may get you started, but if you are not investing in marketing, either a significant amount of time, when you are newer, to a significant amount of dollars as your business grows, you cannot remain competitive. Many years ago I wrote help systems for three different CMS software companies. It was at the beginning of this industry and there were a lot of new companies vying for a piece of this new market. Of these three, only one put actual money into their marketing and only one still survives.

You needed to market your business when you got started. You will need to continue to market your brand over the years. This means you will need to continue to evaluate your target market, location, pricing, promotional strategies, and the competitiveness and relevance of your product/service.

3. Not Investing in Training and Learning

When you don’t know what is coming up, what is changing, what is in the future for small business, or what has happened, you cannot stay relevant and competitive. Imagine a business owner at a stall in a market, that only accepts cash when your competitors at the same market all have wireless payments systems. Your business cannot compete.

As a business owner, your learning curve is continuous. It does not stop when you have your first sale, your best year-to-date, or a national award. Your business is always looking for how it needs to change and keep up, and that means you, and your team, must ‘keep up’. Look for ways to learn more. If you are not a book reader, then go to a webinar or conference. Sign up for online training, online courses, or hire an expert to come in and share with you and your team. You and your team are the only ones that will care about what your next steps will be. If you, or your team, don’t know, no one else is going to tell you.

4. Not Hiring Before You Need The Help

If you wait until you put a campaign in place, and you get a bunch of new sales that you now have to deliver, you will likely not have the time to properly on-board new employees.

The saddest statement I hear form business owners that are doing well, is that they are too busy to take on new clients. If growth is your goal, then hiring support is your future.

5. Poor Customer Service

The work you do with your customers is not just about giving them the sales pitch and receiving their money, it includes their entire experience, from lead to past client. If your target market, prospects and clients are upset about any aspect of your business and you ignore it, you can say goodbye to more sales. And goodbye to sales that would be generated by past clients can stop your business from ever being successful. Here are some statistics from a Canadian textbook1.

“A 5% increase in customer retention can increase a company’s profitability by 75%”1

The 80/20 Rule applies: “80% of your company’s future revenue comes from 20% of your existing customers”1

These numbers are too significant to ignore and so is the experience you give your clients

If you want to get to the ‘finish line’ with your business, then you have to have a business that continues to see & understand the future, evaluate & measure your current situation, and continue to be competitive & sought after by your target market.


1 2017, Good & Meyhew, Building Your Dream: A Canadian Guide to Starting Your Own Business, 10th Edition, p 285)

This article is 100% original content – The articles you read in this blog are 100% created by Barb Stuhlemmer, not by AI.

 

 

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