The reason most small businesses stay small is that they think small. Also, they fail to think in perspective. A small business owner plans for a few months ahead at best. If you ask him where he wants to be 5 years of now, he’ll give you a puzzled look or say something trite like, “In business.” While the importance of that is undeniable, the way you approach things will determine your outcome.
As a small business, you can not only survive but grow. Read on to see some common small business mistakes. We, at POSQuote.Com, learned those by working with small business owners.
Too focused on the bottom line
Excessive focus on profit is understandable, especially considering that most small business don’t even manage to break even in the first year or two. If there’s no profit, where does that leave you? The problem is not with the mentality, but with the element of desperation. In your efforts to make money, you neglect things like customer service. That can make the difference between keeping and losing a client. You neglect things like inventory. You’re stocking up on things because you like them or they’re cheap, or you think they’ll sell well.
Sit back and think – are they selling as well as you hoped? Can you calculate how much you paid for them and how much you sold them for? What’s the difference?
Is it worth it?
Bulking up on the same/similar products
It’s cheaper to buy wholesale, in bulk. But the bulk isn’t very attractive to customers. If you’re selling one and the same or similar products, you’re not reaching much of a market. You’re only reaching a specific client type who needs the same thing, like casual clothes or power drills. And these clients will be loyal to you. They’ll know that when they need a new T-shirt or drill, you’re there right around the corner, ready to offer it. But you’re not reaching a broad market that way. I’m not saying you should stop selling what you’ve always sold or stop providing the service you’ve always provided and are known for. Just try to diversify things a bit. If not, you’ll get stuck in a dead-end street.
Your windows should feature a variety of interesting products, not a line of the same ones. People are drawn to attractive displays. It often happens that you see something beautiful in a window and go in only to find that it’s the only one of its kind they sell, and they’re not even selling it because it’s only for show. So, you might feel a bit disappointed. But the tactic worked, didn’t it? You’re in the store. You might decide to buy something else. It might not even be something you thought about buying or even need, for that matter.
So ask yourself this, as a small business owner or manager: Is keeping your boring window the same as it’s always been better than this?
It’s tempting to bulk up on things because they’re cheap. Their retail value is always higher and profit is a sure thing, right? Well, no, not exactly. You’re misjudging demand. Everywhere you go, there are goods in bulk. People are looking for something different. It may be worth it to invest in something a bit more costly because you’ll also sell it for more.
Skipping the Planning Phase
Planning may be boring, but you will be operating in the dark without a solid plan for your business that includes business idea research and market potential. The most important plans to consider include a business plan, a financial plan, and a marketing plan.
Not Setting Goals
Goals can give you direction when you first launch your business, then keep you focused during the day-to-day operations. You can identify where you want to go and outline specific steps that you will take to get there by making sure your goals are reasonable and achievable.
Undervaluing Your Offerings
Many times, fear of failure and lack of confidence in our ability causes us to under-price our products and services. This undermines the unique value you bring to the table and opens up the possibility of resentment and frustration, making it a dangerous path to take. It takes great effort to recover from undervaluing your goods, so you should explore the market thoroughly as you start your business to identify the best cost for what you’re selling.
Being Afraid of Marketing
Marketing can take many forms. There’s traditional print and TV advertising, word of mouth referrals, and (of course) the KING – Internet marketing. There aren’t any fixed rules when it comes to marketing; the best type of marketing for you depends on your target audience and business. The mistake is assuming business will just come to you and you don’t need to market.
Avoiding New Technology
Technology can give small business owners new opportunities, help us save money, and help us do our work more efficiently. New technology may take time to learn. It can be intimidating. It can be hard to understand at first, but an unwillingness to adapt to technological advances will damage your business in the short- and long-term.
We’re tempted to court low-paying customers because they’re easiest to reel in. You’re buying their loyalty with your lost profits! What profits? The ones you lost because you weren’t catering to well-paying customers. They’re the ones who deserve your time and effort and great products and service. It pays off to invest in quality – quality materials, quality service, quality staff, and quality customers.
Thank you for reading our short piece on the biggest mistakes made by small businesses. There are a lot more where this came from. Do any of these apply to you? Are you making any of the mistakes you read about in this article? Are there any other common mistakes small businesses make? Please share with us in the comments section down below. Your contribution is important – small businesses everywhere can learn something from it and your experience as a small business manager or owner.