1. Not Having a Business Plan or a Budget
You should have a detailed business plan so that you know exactly the path that you will need to follow to achieve success.
You also need to develop a good, workable budget. This will give you an idea of the funds that will be required for you to meet various expenses, along with a provision to handle unexpected expenses.
2. Not Keeping Track Of Expenses
Many times, owners of small businesses are too busy to keep an eye on expenses; therefore, they usually end up spending a lot more money than they would have liked to.
If you do not have a good idea of your expenses, then your suppliers could take advantage of this and hike up their prices.
3. Not Making Smart Purchasing Decisions
Sometimes small business owners tend to make bulk purchases for a very small additional discount – without realizing that there is a cost attached to transporting and storing the products.
Or, they might let go of a very good offer without thinking of the additional profit that could be earned in that deal. Decide whether to purchase in bulk only after evaluating the offer on hand with your financial position, storage capacity and market conditions.
4. No Control over Credit Cards or Personal Expenses
If your personal taste for the high life is higher than your earnings, or if you cannot resist swiping your credit card at every store that catches your fancy, then you could soon have a cash flow problem in your business – or worse.
The fact is that credit cards are only for your convenience and you will have to pay interest on those unpaid expenses. Keep an eye on your credit card bills and pay them on time to stay in control.
5. Advertising Through The Wrong Media
Many small businesses do not set a budget for advertising and end up spending a lot of money by advertising on TV or other expensive media.
These expenses can be avoided if you advertise via flyers or on the Internet. By trying to impress people through an advertisement campaign that is way too expensive for your small business, you will put too much pressure on your sales and your profits.
