Small Business Topics: Mistakes In Small Business

Yes, small businesses can succeed! The success of your business depends not on its size but in the quality of its execution and implementation. Here are some common mistakes business owners make and how you can avoid them. a. Focusing on tertiary work: Many small business owners are so overwhelmed with non-critical work that they have very little time left for strategic, more important business decisions. It is far more important not to get bogged down by the little, trivial details of everyday business. Instead, you need to stay focused on your core competencies and drive the business forward. If you are understaffed consider outsourcing all non-core work. b. Not making an honest assessment: Most small business owners don’t know what’s happening in their own business. They mostly presume they know it, but fact is they are never really on top of things. It is essential to honestly evaluate the current state of your business. Take an employee-wide survey or ask your subordinates and colleagues for honest feedback. This will provide a much needed honest assessment of the current situation in the company. c. Not setting timelines: Most meetings go by without end objectives being met. The reason for laying down a plan and conducting meetings is to ensure each responsibility is implemented within the timeframe. Therefore set realistic goals and set timelines to each plan. Delegate work according to skill sets. This will also ensure all employees are happy in their responsibilities and job skills. d. Not performing follow-ups: A crucial determinant of success is how much you follow-up and ensure implementation. It is necessary to follow-up and to ensure all tasks assigned are completed within time. Else the plan just remains open ended with no near end to completion. So ensure to keep reminding and asking your subordinates on the plan at hand. If you can’t, delegate the responsibility to someone else. e. Investing more on technology vs. people: One big mistake small business owners make is to invest heavily on new technology as opposed to their own employees. It is a company’s employees who drive the business forward and get new customers and contacts. Therefore it makes perfect business sense to invest more in people. f. Not remunerating yourself well: Most small business owners multitask a lot. It could be because of a shortage of capital, lack of resources etc. However, whatever the reason, when it’s pay time, ensure you remunerate yourself according to whatever effort you have put in. Most business owners undervalue themselves and end up getting paid less. Don’t make this mistake. Pay yourself well, that way you will stay motivated too. g. Work life balance in jeopardy: Most CEOs of successful Fortune 500 companies have a happy, family support system behind them. If you want your business to flourish, make sure not to compromise on your personal life. Take care to balance out work and family time. By seeing to a holistic balance, you can enhance your business growth in a short time. Now that you know the mistakes, take active steps to avoid making these mistakes. These are common pitfalls that business owners fall into. So take note and stay away from these! (c) 2007, Doug and Claudia Brown of www.whatisyourplan.com All rights reserved. Reprint rights granted so long as article and by-line are published intact and with all links made live. Doug and Claudia Brown use their 40 plus years of business building experiences to educate people and businesses on how to dramatically increase their revenues. Free Report "17 Strategic Steps to Steps to Achieving a Six Figure Income or More" at http://www.whatisyourplan.com/ By Doug and Claudia Brown Published: 12/13/2007

Article resource: http://www.buzzle.com/articles/top-7-mistakes-that-small-business-owners-make-and-how-to-overcome-them.html

Anyone considering starting a business needs to understand the common mistakes which lead to business failures. Ask yourself just the difficult question of how you are going to manage your business.

Revenue for your business does not mean that it is successful. There are many other factors to consider when managing your business that also play a part. Those other factors can also make or break your business.

Some of the more common mistakes which businesses make include.

Not striving for constant improvements.

The thing about business is that if you're not leading the pack you could be considered obsolete and that is not where success lies. If you want to drive sales for your products and services you need to be on the cutting edge with your offerings. Constantly push the envelope to keep a steady flow of new customers along with satisfied ongoing clientèle.

Bad service can lead to bankruptcy

If your customers feel they are not appreciated and receiving sub-standard service, you will be helping your competitors to achieve success. Why? Because if customers that feel they are receiving poor service will be quick converts to your competitors. It is the leading cause of declines in sales and business failures.

Marketing mistakes

If your target market does not know you exist, you can't be successful in business. For a marketing campaign to be effective you need a clear message that is both understood and favorably received by your target market. Without effective and clear advertising if will be very difficult for your business to generate the customer support needed to survive.

Pricing yourself out of business

Too many businesses think that if they raise their prices they will achieve more profits. Unless your business monopolizes the market with a product which is a staple for life you may be mistaken. The fact is that most purchases are driven by pricing factors. If your competitors have similar products available for less your business may be in trouble. The key to pricing is achieving a price that your customers find value in.

Lack of investor capital

Many investors that are new to business start ups make a very common mistake when planning for expenses. They will add up the costs of getting the business going which might include inventory, equipment and set up. They will neglect the most crucial element which is businesses do not achieve positive cash flow immediately after setting up shop. Start ups will commonly operate with a negative cash flow for a period of time while they are building their business and cultivating a clientèle. As an absolute minimum you should have three times the cost of getting your business set up to start your working capital. That is money that will keep your business rolling until you can build a positive cash flow.

As an example if the cost of setting up your business is expected to be $10k for equipment, location, inventory and misc expenses you should have another $30k set aside for working capital.

No working capital is the primary cause of bankruptcy in business.