How To Resolve 5 Common Business Mistakes

With many tasks to juggle, decisions to make, and the fact that they are humans, it’s not surprising that business owners make mistakes. Mistake may not even be the right word. Usually, they know what to do but the things that aren’t crises get de-prioritized as daily fires are fought.

These things – things they know would have a significant positive impact on the business if they just did them but keep getting put off – are often what are creating the fires in the first place. It’s like exercise. You know it’s good for you, but if you don’t get out for that power walk or cross-fit session today, it’s not going to matter. Not really. Exercise is easy to de-prioritize right until the day after the heart attack. In this post, we will discuss five common mistakes, erm, de-prioritizations, that small business owners are likely to make, and the most effective hacks used to avoid them.

1. Lack of Planning

Plans are never “right” because we haven’t invented a time machine (yet) and can’t accurately predict the future. As a result, planning can be perceived as less important than “getting the work done”. This is true at a macro-level with corporate strategic plans and annual budgets, and at a project level as well. Many small business owners start their businesses without a clear plan, which makes total sense. They are throwing whatever they can against the wall to test and see what sticks. The first million in revenue is all about testing the market. After that, though, it’s time for a strategic plan. Same with project plans – at first people don’t even know what to predict so they don’t bother, or they create one plan but it’s so far off the mark, they falsely conclude that “planning doesn’t work”. Whether it’s an entire company or just a small project, over time a lack of planning can lead to a lack of direction, wasted time and resources, and in the worst cases, failure.

We’ve found the biggest roadblock to planning is scheduling the time to plan. So, whether it’s annual strategic planning or a project kick-off meeting, once you know it’s necessary get it in the calendar of all of those involved ASAP. The further out you can plan to plan, the more likely the people you need will be available. Once the planning is calendared, the magic of a deadline comes into play forcing agendas and prework along. If your issue is not knowing how to plan or not having time to prepare, hire someone to help you. There are many reputable professionals who have been down this road many times and can teach you to plan while helping you plan. How’s that for efficient use of time? You’ll know whether you need to hire them again for next time or if you can just go it alone.

2. Not Knowing Your Customers

Life would be easier if you didn’t have customers to please, but the business wouldn’t last very long without revenue so that’s not a great solution. Since you need them, you also need to understand their ever-changing needs and preferences, or you will be less likely to provide them with the products or services they want, and leave room for your competitors to swoop in. While your gut and the assumptions it leads to are a piece of the puzzle to knowing your customers, it’s crucial to do more formal research around your target audience and understand their behavior and buying habits. This will help you tailor your products or services to their needs and provide a better customer experience.

Calendar a meeting with customer facing staff and ask them what they would want to know about your customers. Their questions probably fall into a few buckets – why do they buy, when do they buy, who do they buy from, what’s the real problem they are trying to solve, what do they dislike about their current process, etc. Program these questions into your CRM so that you can start to create a database of actual information instead of relying on assumptions. No CRM? Start an excel sheet. No computers? Come on – that’s ridiculous (but you can get paper and a binder).

3. Ignoring Your Finances

One of the most significant challenges small business owners face is managing their cashflow and maintaining profitability. Keeping track of expenses, revenue, and taxes can be overwhelming, but it’s essential to understand your financial situation to make informed business decisions. Make sure to keep accurate records and seek help from a financial advisor or accountant if needed.

You got into business to make money. Pay attention to the money. Hire a professional. Yes, every business has an outside accountant that helps keep their company tax efficient, but that’s not the professional we’re referring to. Someone that can help you with managerial reporting, appropriate software, and keeping control of expenses will pay for themselves many times over. Some business leaders put off this hire, having falsely concluded that a Controller is just “overhead”. Sure, that’s where the salary shows up on the P&L, but the other items in the expense category can be directly affected by this individual’s close attention to the numbers. Get the most competent person you can afford and then let them pay for themselves in savings.

4. Failing to Adapt

Kodak, Blackberry, Blockbuster…the list of large companies that did not adapt is long and littered with cautionary tales. Businesses need to adapt to changes in the market and industry to remain relevant and competitive. Of course, ignoring trends or not innovating can quickly lead to failure in large organizations, but inertia can be quite strong in a smaller organization, particularly one with loyal customers. If it ain’t broke, don’t fix it, amirite? Big strategic shifts like a new software implementation or entering a new market can take years to get right. If the project seems too big to tackle right now, it’s likely to get even bigger and more intimidating the longer the organization waits. And the longer the organization waits, the more urgent the project becomes.

If you’ve tackled the “failing to plan” mistake #1 this issue is likely less of a challenge in your organization. Nonetheless, ask yourself: When was your last software audit? When does your lease expire and when will you need to start looking for new space? What’s the plan for new equipment? And that’s just on the maintenance side of the business.

Someone should be formally accountable for studying market trends and innovation, as part of their job description. This is probably the leader of the organization but doesn’t necessarily have to be. Regardless, assigning this duty makes it far more likely to happen. At minimum, schedule regular PESTLE, SWOT, or 5 Forces analysis on your industry during strategic planning.

5. Trying to Do Everything Yourself

Steve Jobs’ leadership style during his first term at Apple has been characterized as Genius with a Thousand Helpers. Running a small business can feel like a one-person show, and it’s tough to spend money on talent when you could do it yourself “for free”. The thing is, when the leader takes on other jobs, often the leadership duties suffer. We can hire finance professionals, operations managers, marketing gurus…the only job that can’t be delegated is leader. If the leader is busy acting as the bookkeeper or project manager, who is doing the leader work? Likely no one, and that often results in the other four common business mistakes. Trying to do everything yourself can lead to burnout and prevent your business from growing. Consider delegating tasks or hiring staff to help you manage your workload and focus on the areas where you excel.

In conclusion, starting and running a small business requires hard work, dedication, and foresight.  Avoiding these common mistakes can help increase your chances of success and create a solid foundation for your business. Remember to plan, understand your customers, manage your finances, adapt to changes, and seek help when needed.

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