- Not Having a Business Plan or a Budget.
These 2 factors are very important if you want your small business to survive in the long run.
You should have a detailed business plan so that you know exactly the path that you will need to follow to achieve success. Coupled with that, you also need to develop a good budget. A good, workable budget will give you an idea as to the funds that will be required for you to meet various expenses, along with a provision to handle unexpected expenses.
Not having a viable business plan is just like driving a car with no steering wheel. Don’t leave the success of your small business to chance or luck – plan out everything in advance.
- 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.
To do this, consider purchasing an automated accounting software package such as QuickBooks. This way, you’ll have all your expenses displayed at your fingertips, and it will be much easier to manage them.
- 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.
- 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.
Realize the fact 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.
Limit your lifestyle according to your income.
- 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.
Use the information above to ensure that you are not wasting money in your small business. After all, money saved is money earned.
