Here are some mistakes that small-business owners tend to make and how to avoid them.
Wrong Place with the Right Item or Vice-Versa
Most small business owners do not conduct proper research before starting a business and end up starting at the wrong location with the right products, or at the right location with the wrong products.
In this case, you can either change your location or your products and services; but be aware that this process may lead to more problems that get worse before they get better.
Not Enough Dough in the Oven
Many businesses fail because owners miscalculate the time it will take them to get on their feet financially. Once the money runs out, the business begins to flounder before ultimately collapsing.
If you see potential in the business, then apply for a loan to buy yourself more financial time. If you have too many customers who purchase on credit, then try using the services of invoice factoring companies, who will provide you with cash for your business against your credit sales.
Incompatible Partners
Many business owners bring in their friends as partners or hire them as employees. This might not be a good idea, since you may worry more about hurting their feelings than about the best interests of your business.
Treat partners as professionals, and only hire staff that can do their jobs well. Hiring and then firing friends can take an emotional toll on you after awhile.
Employees That Turn Into Maggots
Most small businesses go out of business not because of outside factors, but rather because of inefficient and staff members that are less than honest (stealing).
Install electronic surveillance in your office or store to prevent your employees from eating up your business from inside out. This remedy could be a bit costly, but it will turn out to be money well spent.
Not Prioritizing Expenses
In the initial years, plan and spend only on those items that are related to your business and that can help it succeed and grow. Having a fancy car or going on a world tour can wait until you have the money in the bank.
Keep a tight leash on your expenses and your credit cards. Use your credit cards wisely and inspect all statements. Split larger expenses into smaller ones and pay them little by little.
Not Having a Plan
Many times people just start a small business because they have seen an opportunity. However, without a proper plan, you could end up losing in the long run, even if the opportunity is a good one.
You need to have a time-based, written business plan and determine the ways your goals will be achieved.
Letting the Business Take over Life
Do not treat your business as an obsession, but rather treat it as an interesting hobby that is earning money for you. Take short breaks to rejuvenate yourself. If you are obsessed with your business, its problems become multiplied many times over – and that can affect your judgment.
So consider the above and keep your business financially healthy. These tips will help you avoid these common mistakes before they happen.
