You’ve had enough! You’re sick and tired of climbing the greasy pole that is the traditional career path and butting your head against the proverbial glass ceiling. You’ve had enough of the limitations your job and your career place on your ambitions. You’re done with being passed up for promotion, further training and development time after time. It’s time to throw out the rulebook and write your own. It’s time to dust off that business plan you’ve been working on and really show the world what you’re made of.
But of course you know that when you choose to go into business for yourself, you do so with a clear understanding of the risks. You know that you will no longer have the security of a regular wage to fall back on and your livelihood is linked to the success of your business. What’s more the odda may not necessarily be in your favor with 9 out of 10 startups failing because they didn’t start their business journey with an eye on the obstacles and potential pitfalls.
Here we’ll look at some commonly made mistakes that could cause your business to fall at its earliest hurdles and how to overleap them with grace and aplomb…
Assuming that you have to do everything by yourself
When starting out in business, it quickly becomes clear that there are a lot of demands on your time. In fact, it can feel like your hands are so full with the operational aspects of running your business that you spend all of your time on the frontlines with your employees and hardly have any time to spend in your office.
No matter how small your business, it’s a common fallacy to assume that you have to do everything yourself. While you may think that this makes you a diligent business owner, in truth it can make you into a relentless micromanager… And nobody’s too keen on those.
Don’t be afraid to outsource aspects of your operation to talented third parties. You can find useful agencies at Sortlist.com. Here you can find all kinds of helpful collaborators like marketing, branding and social media experts to prevent you from spreading yourself too thin.
Don’t be afraid to delegate nor to spend time in your office. It’s from here that you’ll make the important decisions that will carry your business forward.
Assuming your business is too small to think about branding
Many small business owners assume that branding is only a consideration for huge multinational corporate titans with eight figure turnovers. But the truth is that no business is too large or too small to give care and consideration to its branding.
After all, your branding is what will separate you from your competitors. It’s what will help to build the perception of value in your business, your services and your products.
Your branding is more than just your logo or the color palette of your website. It’s everything your business says and does. It’s how you train your employees to handle difficult customers. It’s the way you greet people when they walk into your store. It’s your returns policy. It’s how you interact with your social media following. It’s the voice of your content marketing materials.
Your brand should be the promise that you make to your customers and the set of standards that they can expect every time they do business with you. Over-simplify your approach to your branding (or worse still, ignore it altogether) and you may find that your business doesn’t resonate with your target audience in the way that it should. This may result in low conversion rates and a frustrating inability to retain repeat customers who will facilitate your growth.
Keeping an eye on the purse strings is fine, but beware of under investment
Many new entrepreneurs are extremely cash-conscious, always on the lookout for ways to cut costs wherever possible. However, while this approach is admirable, it can lead you to under-invest in the infrastructure that will support your growth and allow you to provide quality to your target market.
There’s a fine line between keeping a close eye on costs and under-investing in your business. By all means cut unnecessary costs to ensure that your cash flow remains healthy. But don’t be shy of spending when you know that a spend will benefit your business. Capital expenditures like new equipment or software or even personnel are all overhead costs which could boost your profitability in the long term.
It’s all about calculating the ROI of every perspective spend and knowing the timeframe within which you can expect to make your money back. This will allow you to make the capital investment that will grow your business while still maintaining the liquidity you need to keep your vendors paid and operate efficiently.
Not knowing what to do when you need fast access to cash flow
Speaking of liquidity, there may come a time when your cash flow dries up. Keep your eye off the ball for a moment and you may find that you don’t have the liquid assets necessary to pay vendors or other quotidian expenses like utilities or rent.
If you’re not careful, this could lead to a cycle of debt which may prove increasingly crippling to your business. Thus, it’s essential to know what to do to get your cash flow… flowing again.
Some great ways to improve cash flow include;
- Throw a flash sale- You may have to take a hit on your profit margins but that beats not being able to pay vendors and creditors. Plus, throwing a sale is a great way to generate buzz and foot traffic around your business.
- Incentivize customers to pay invoices on time- You may wish to add incentives like discounts or exclusive offers to fast payers.
- Use late penalties to get tardy customers to pay up- Not only will you ensure fast payments, but you may make a small sum of extra profit on late payments.
- Consider Invoice Factoring– Invoice Factoring is where you sell unpaid invoices to third parties for quick cash. While they will, of course, take a cut for themselves, it may be the last-minute bail-out you need.
The best of luck in your business journey. Keep an eye out for these common mistakes and you’ll have all you need to make a successful start.
