When running or starting a business there are numerous mistakes you can make that can impact on your cash flow, motivation of staff, happiness of you and your team and your customers perception of your business. Here are a few to avoid.
1 Not acting on changes to your market – this could be new competitors, less need for your product, price changes and technical advances. You need to be open to making changes to deal with new situations that impact on your business or be quick to maximise marketing opportunities when they appear
2 Not training staff – staff need to be kept up to date with latest development in your product and market and feel motivated to do their job well. Also praising staff when they do a good job is important for morale
3 Employing the wrong staff – especially if this is new to you or is not a regular task, you might not be assessing applicants thoroughly to get the right staff. You need an interview process that measures applicants in the same way and will allow you to assess their suitability. If you are not good at this get help, as employing the wrong person can be costly.
4 Employing family or friends – you may get on but in a work situation this changes. Be prepared to fall out permanently if you don’t think the same, set clear standards, role definitions and keep your relationship out of the workplace. It also impacts on others.
5 Not setting targets – you need to set these for your company, yourself and your staff. If you have sales staff, give them targets and commission or incentives to keep them motivated. Not setting targets leads to drifting, not growing
6 Getting busy and stopping marketing – in most businesses there are seasonal variations but many ups and downs in trade are due to stopping marketing, selling or networking when you are busy with work. That’s a sure recipe for a slow down later.
7 Not chasing up payment – cashflow is key to any business. If your customers are paying you late, you need to chase up payment or preferably get someone to do it on your behalf.
8 Not reviewing costs – many businesses do not have a clear view of their exact costs and the margins they are making and it’s easy to run into trouble quickly. Not selling the most profitable product, discounting too heavily or having overheads too high all need to be monitored at least monthly.
9 Ignoring customer feedback – taking days or not replying to customer feedback at all is a recipe for disaster especially with complainants taking to social media if they don’t get results. Even better is to ask customers at least once a year for feedback which makes them feel valued, stops issues from happening and sometimes results in comments that improve your business.
10 Overvaluing your business – many businesses are started with an exit date in mind, especially those in technology. If you are made an offer for your business, need to sell a share to an investor or want to sell up, be realistic about what your business is worth and get specialist advice as they will know more about what is realistic in the market.