Building a business is a journey full of decisions and fraught with risk and there’s business mistakes to be made and learned from and some to avoid if you want to succeed.
Most mistakes are made when a business is still young and they can be avoided. Here’s our list of the top business mistakes to avoid:
1 – Not getting professional advice
When running a business, it is important to get the best possible advice at all times. All businesses have been guilty of under-funding at certain points, but one of the worst business mistakes to make is to be tight when it comes to professional advice.
If you engage the services of cheap professionals, then what you get in return might cost you many times over what you paid for that advice in the first place.
Just because an accountant or lawyer has letters after their names, does not mean that they are experts. You should keep your ears to the ground and look firms up on the internet to see if they have a good reputation.
You also need to look at things in economies of scale. If I wanted to get advice on budgeting, and it cost me $500 dollars and save me wads of cash in the longer term, then that is a good investment.
2 Taking things at face value
In direct contrast to number one, you should never blindly follow advice, no matter who gives it to you. This is another very common business mistake to make.
Whenever you get advice, whether paid or from a friend, always follow it up with your own objective reasoning. Get other opinions, especially from people who are not in the business as they will see things much more simply.
Just because you heard it from an expert, does not mean that it makes sense for your business model. Always look at things from your own perspective.
3 Setting the wrong goals
Setting the wrong goals is a mistake that is common in both startups and established businesses. You need to set goals and you need to work on reaching them within a set time frame.
The first important thing is to set two goals – long term and short term. You then need to link the first set to the second set – mapping out your journey, so to speak.
You then need to find ways to make that work and ensure that you keep pushing to reach them. If you are spending more time thinking than actually doing, then you really need to revisit your goals and set better ones, or a better way of reaching them.
4 – Doing everything yourself
One of the most common business mistakes is to try and do it all alone. If you want your business to grow and become successful you have to delegate. Doing everything yourself might be the most effective way to get your budding business off the ground, but to make it grow, you have to take on staff or outsource some operations.
Just because you can do your own accounting or sales copy, does not actually mean that you are very good at it.
Even if you do have a flair for certain business tasks, it does not mean that you should always try and save money by doing it yourself. Think about other areas where your time could be better utilised.
5 – Being biased about your product or service
You have built a business from the ground up and you are very right to be proud about it. But that does not mean that you should always assume that your product or service is the best on the market.
Your ego might take a hit, but when a product or service does not fulfil expectations, then it is better to cull it and move on to another. You should also resist the temptation to pursue product perfection. This can lead to squandered funds and resources that could have been better utilised elsewhere.
6 – Not spending enough on marketing
Some business owners cannot grasp the concept of return on investment with marketing, and that is one of the worst business mistakes you can make.
Marketing is often quite low on the list of priorities, but you really should be allocating a decent chunk of your budget to this activity.
Why? Because it generates sales. Word of mouth is great for a sound reputation, but it’s not as likely to bring you new business as a well thought out marketing campaign is.
Dexterous Group uses various cloud-based software solutions to analyse your data to show you how effective your marketing campaign is and how many leads it turns into sales.
7 – Don’t ignore the competition
You should always be aware of what your competition is doing. You need to know what they are doing better than you are so you can up your game. You should be wary of obsessing about them, but you should always beware of any developments taking place in the business space around you.
Not only do you need to make sure you are better than your competition, you also need to convey that message to the outside world.
8 – Paying yourself a low salary
Many business owners pay themselves a low salary because they believe that it’s better to put the money back into the business.
This might be true in theory, but what happens when you run out of money and have to dip into your business account. It can lead to blurring of the lines where you might not even realise what your business’ true performance levels are like.
Make a clear distinction. Pay yourself the going rate and let the business tick over separately.
9 – Spending needlessly
Web hosting, fancy meals, light fittings, wallpaper… the list goes on and on.
While you should take pride in your business, you should avoid spending money on needless things, especially when the business is still young.
Establish what you need to spend to fulfill your needs comfortably and spend accordingly. Do you really need a speaker surround system for your small office?
10 – Doing business with the wrong people
One of the most common business mistakes is to get involved with the wrong people. When in business, you should always research who you are doing business with. Do they have a good track record? Are they respected? Do they pay on time?
Do they stick to their end of the bargain? These are all questions you should be asking before you do business with anyone. Like with everything else which is business related, go on instinct, if something seems off, seek another partner.