4 Small Business Mistakes That You Need to Avoid
Starting a micro business and/or managing a small business is a daunting task – there is no two ways about it. This is especially true during an organisation’s infancy, where over 30% of Australia’s small businesses fail within four years of opening their doors. While this may not seem too bad, small business owners are feeling more anxiety than ever before. Those predicting a decline in growth has jumped from 12% to 17% from last year, with one third believing that their business is at a moderate to high risk of becoming insolvent in the next 3 to 5 years!
These are the days when owners are often forced to spent time in the business and not on it!
So, what exactly are the reasons that may be causing businesses to fall through the cracks? Here are four mistakes that small businesses make that edge them closer to the dreaded ‘business closed’ sign.
1. Poor business planning and flexibility
What is your business mission? Your goals? How are you going to implement strategies? These are all important questions you need to answer when developing and managing a micro or small business. As Benjamin Franklin once famously said – “If you fail to plan, you plan to fail”.
Talk to any successful entrepreneur and you will learn that strong and well-thought-out plans are at the heart of any successful business. They provide you and your employees with direction; help you keep track of performance and even assist in attracting new investors. Without one, you are creating an environment of miscommunication, poor problem-solving and meager management. The Australian Securities and Investment Commission make it evident that there is no point in flying blind, with 44% of businesses in the 2011-12 report going under because of suffering poor strategic management. In the end, working on a business means building a plan and strategy.
2. Failing to meet customer needs
According to the ABC, the success of a business all comes down to how they understand their customers.
“[Businesses are] not offering any real reason to come in. You go into one store and you go to the next store and they’re all the same… you’ve really got to differentiate and make it an experience for the customer when they come in.” – Robert Simpson, Retail Consultant
Think about your business’s customers. Do you know who they are? What hole does your product or service solve? How does it compare to competitors? By failing to research your industry and understand your customer’s buying behaviors and patterns, you are quickly making yourself susceptible to meeting the same fate that 42% of startups in the CBInsights analysis survey faced: failing because of no market need for their businesses.
3. Not managing cash flow
Cash management is often the downfall of many small businesses, especially those with marginal experience in finance. Let’s face the facts: no matter how great your business idea is, you cannot survive if you do not have proper capital or resources.
According to Entrepreneur.com, poor cash flow management often derives from an overabundance of optimism and a poor understanding of monetary value. This can often come in the form of overestimating future sales estimates, engaging in frivolous purchases and even failing to set up and properly maintain a budget. It is for this reason that your small business needs to be proactive with its cash flow. You need priorities, safeguards and a realistic outset of the pitfalls that might face you, along with ways to overcome them.
4. Not aking advantage of digital marketing
More people are online than ever before. In fact, did you know that 60% of Australians access the internet at least 5 times a day, with a further 68% reading online blogs before making a purchase?
Creating a social media and website presence is a cost-effective and measurable way to not only improve reach, but to also strengthen recognition and increase leads and conversions. With two-thirds of consumers believing that organisations need to go online to survive, it is shocking to think that only half of Australia’s small businesses engage with social media!
Without taking online elements into account, you are preventing your business from maximising its competitive edge and potentially succeeding within your chosen industry.
The Bottom Line
In today’s competitive industry sectors, it has never been more important to take all elements of your business into consideration. If you want to take your entrepreneurial skills to the next level and thrive as a micro or small business, Asset College offers two nationally recognised qualifications.
Already in Small Business – Looking to develop it?
In this course, you or any eligible employee, will learn how to help take your small business to new heights through digital marketing, business planning and finance management.
Looking at starting your own business?
People say starting a business is hard and it can be even tougher when you’re in it alone. But you don’t have to be alone in the journey!
Asset College can help get you started. In this course you will learn how to:
- Research business opportunities and come up with a plan
- Figure out your finances and what will be required to start the business
- Understand and apply taxation and insurance requirements
- Network like a pro and;
- Get your first client!
Government funding may be available for eligible participants under the Certificate 3 Guarantee. Review eligibility criteria here.
Contact us today for more information.