So many businesses fail before they have had the chance to get properly started. There may be many and varied reasons for this – a lack of capital, taking on too much debt, expanding too fast, mismanagement of resources, and so on. Strong and effective management is required from the start and no business owner can afford to make avoidable mistakes.
Five of the most common oversights that can ruin your business and be avoided at all costs, include:
1. Poor planning
2. Poor budgeting
3. Ineffective marketing
4. Being a ‘me too’ provider
5. Innovation is ignored
Poor Planning – If you don’t take the time for proper planning, such as writing a business plan which includes your vision, mission, ethics, etc., then you are likely to fail or at least falter. Your business plan incorporates your main point of reference to keep you focused and on track to ensure you meet your goals and iterate as appropriate.
Poor Budgeting – From your initial capital investment, ongoing expenditure and keeping a reserve capital, you must take charge of your budget. How can you measure your profit and loss and cash flow if you don’t monitor how much you are spending on supplies, rental costs, staffing, expenses, and such like? There won’t be much point in worrying about your end-of-year tax returns if you fail to keep sound financial records and monitor them at least monthly to enable you to take swift, corrective action if necessary.
Ineffective Marketing – Who are your customers? How many are there? Are you reaching out and engaging with them? Where is your business located or to be located? Do you have an up-to-date website, or indeed a website? How will you ensure they buy from you and not the competition? Do have a distinctive brand? If you struggle to answer any of these questions, then you should seek marketing advice – fast!
Being a ‘me too’ Provider – Providing a similar product or service to that already on the market can be disastrous, especially for smaller businesses who will be unable to compete effectively in a mass market. The key is to differentiate: provide something which is unique and difficult for rivals to copy. Specialising or catering to a niche market will help your chances of success.
Innovation is Ignored – Ignore innovation at your peril. If you allow your product or service to become outdated, it could easily be overtaken by new (and existing) entries to the industry. Stay alert to what new technologies are being introduced. You may have fostered excellent customer relations and believe they will remain loyal to your brand. What if something better comes along?
As a business owner, you should be industrious in your efforts to avert these oversights to help you secure its success, sustainability and profitability – and avoid ruin.