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9 Small Business Mistakes that Hinder Growth and Profit

While experience can be a great teacher, learning from someone else’s experience can save you time, money and a lot of frustration – especially when it comes to growing your small business. So here are some common business mistakes you want to avoid or fix.

Mistake #1: I Can Do It On My Own

Most of us became entrepreneurs because we are experts or skilled at something and believed we could do it better than competitors or maybe our current boss. But building a successful business requires more than technical know-how. None of us are experts at everything – so surround yourself with other experts to fill the gaps. Whether you hire employees, sub-contract work, create joint ventures, work with coaches/consultants or develop strategic alliances – the support you need is available. Avoid this costly business mistake. Don’t try to do it all yourself.

Mistake #2: Keeping Your Business a Secret

Today, a website is a must-have for a small business. It is a great equalizer and can build credibility for you, your company and products. But it only pays off if people who want your products and services can find you. As a small business owner, search engine optimization with relevant keywords and content must be a priority. Use social media and other marketing tactics drive people to your site too!

Mistake #3: Creating Confusion With Potential Buyers

When starting a business, the goal typically looks like this:  generate sales for your core products or services as quickly as possible by whatever means necessary. But if sales for core products are slower than expected, many begin dabbling with additional products or services to generate more revenue. Too many dissimilar products or different messages can leave people wondering what you do and why they should choose to buy from you. Focus on your core strengths and build from there.

Mistake #4: Great Products The Market Doesn’t Want

The best products or services will go unsold if you are talking to the wrong people – those who will likely never buy! Investing your time and money promoting your products or services to people who don’t have the resources, authority or need, today or in the near future, is both frustrating and costly. Who are the ideal customers for YOUR products and services? Be clear on this, find out where they are, how to reach them and then apply your resources to pull them in.

Mistake #5: Talk More Than You Listen

If you want to earn a customer’s business, you need to solve their problem or fill a need. So before you jump into your sales pitch, take the time to ask questions, listen carefully and determine what the customer needs. Your features and benefits are only relevant when they solve a customer’s problem or fill a need. Successful people tend to be good listeners – so you’ll achieve greater success when you spend less time talking and more time listening! Remember, technology and markets change, so keep your pulse on what customers need and adjust accordingly.

Mistake #6: No Follow-Up

Investing resources to generate leads for your company without a proven method to convert them into paying customers is costly. Whether potential customers come to you by phone, email, online or in person, a system for consistent and timely follow-up is a key to sales growth. Take the time to develop a procedure for moving prospects to customers. Take advantage of technology to ensure your process is both efficient and effective. Be consistent and watch your sales soar.

Mistake #7: Disjointed or No Procedures

Documented procedures for all the critical tasks and operations is a key to efficiency, consistency, continuous improvement and profitability. Yet despite the benefits, it’s ignored by many small businesses. This mistake becomes obvious when you hire and train new people, attempt to outsource or start losing customers due to poor service or missed deadlines. Take it one at a time, but make written procedures a priority in your business. The results will surprise you. My Ultimate Systems Guide makes it easy to start building systems and procedures in your small business.

Mistake #8: Hiring on the Fly

“Quick to hire and slow to fire” describes many small businesses. A strong team of people to support your business is certainly important – but only if they are the right people. There are proven hiring systems and tools, including a job description and clear goals, to help small businesses attract and retain quality people. Always hire with a purpose, invest in training, commit to developing your team and be willing to let go of those who don’t fit. Need an easy way to get the word out when you are hiring? Indeed.com is a great solution for small business owners.

Mistake #9: Roller Coaster Marketing

For many small businesses, marketing activities and spending look like a roller coaster, up and down based on how busy you are or how sales are doing. If your marketing is sporadic, your results will likely be the same. The key to attracting and retaining customers is consistency. It is better to do 5-6 lead generation strategies well and consistently than doing 10-20 of them periodically. And remember, marketing to existing customers is just as important as new business marketing — so incorporate both into your marketing efforts.

Which of these mistakes is impacting your growth and profit? Make it a priority to fix them – one at a time, if necessary. The sooner you do, the sooner your sales and profit will grow. And isn’t that why you are in business in the first place?

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7 Business Mistakes That Cripple Success

Starting a business may be challenging. But sustaining success and building a business that really works for you is likely more difficult. Why? Because what helped you succeed early is often different years later. You need to make adjustments. Owners who do, stay in business. Those that don’t become another sad statistic.

7 Common Small Busines Mistakes To Avoid

1: I Can Do It All
You probably started your business because you had a skill and the confidence to do a better job than other competitors or maybe your current employer. But it takes more than technical know-how to win in business. Assess your personal strengths. Then surround yourself with others to fill the skill or knowledge gaps. Whether you hire employees, sub-contract work, develop power partners or hire a coach or consultant, the support you need is available. Don’t try to do it all yourself.

2: Confusing Customers
Without customers, you don’t have a business. It’s true and explains the focus new business owners put on sales, any sale to anybody. But this ‘never turn away an opportunity’ attitude often creates too many disjointed products, services, messages, and targets. It leads to one thing, customer confusion. And confused people rarely buy or refer others! Focus on your core strengths – what are you really good at and why should they choose you? Build your reputation on this and grow from there.

3: New Customers Are Priceless
That’s why we gladly go out and buy them! Whether we use discounts, free stuff or anything in between. It works. But the strategy only pays off if you keep them and serve them profitably. Be clear on who you want and invest your money to get them. When you do, solve their problems, wow them with service and never take them for granted. Sounds easy – but here’s the challenge. Be willing to say no or turn away customers who simply don’t fit. You’ll never make them happy and they’ll rarely make you rich!

4: We Are Small, We Talk
It’s the most common excuse when it comes to written systems and procedures. Big companies certainly have them, but small businesses need them just as much, if not more. Surprised? It’s not uncommon for employees in small businesses to wear a lot of different hats, requiring a variety of skills and knowledge. Some cross-train employees, most do not. But if procedures aren’t written down, it’s difficult for another team member to simply step in when others are away or leave. That alone is a good reason to write down procedures.

Here’s another. When you take the time to write down how things get done in YOUR business, you help others replicate what you want and then do so consistently and efficiently. When you review your systems with an emphasis on how we can do it better, you will uncover opportunities for improvement and increased profit. Everyone wins. You make more money, customers get what they expect and employees feel empowered through their contributions.

5: Quick to Hire, Slow to Fire
It’s not unusual for small businesses to view the team as family. It’s a strength, but can also be a weakness. Getting the right people to support your business is important. A good hiring system that includes a full job description with clear expectations and goals is a good start. It should be used for all hires – even the ones that are family or family friends! Once on board, invest the time to train them. Written procedures really help here! Make their personal growth and development a priority. Be the leader they need you to be.

With that said, a good system and your commitment and best effort will work most of the time. But we’re human. We have all made bad hiring decisions at one time or another. Perhaps the newly hired employee lacked some skill you thought they had. Or maybe he/she was not dependable or simply didn’t fit with your culture. Whatever the reason, doing nothing is not a good option. Be willing to let them go.

6: I Can Get All The Leads I Want When I Want
Like most things in business, you can if you throw enough resources at it. But is that what you really want — a lot of high-cost leads? Successful marketing has less to do with what you spend and more to do with the consistency of your actions. Turning your marketing off and on when things slow down or sales drop is expensive – but also less effective. It is better to do 5-6 marketing activities well and often versus 10-12 periodically. Develop a marketing plan, with a variety of tasks you do every week and month, and you will keep the flow of quality leads coming – at a cost that will make you smile.

7: My Accountant Handles That
If you own the business, you own the numbers. As a trusted advisor, your accountant provides the financial reporting and tax guidance you need for compliance and success. And a bookkeeper can certainly eliminate the burden of day-to-day record keeping. Delegate, but never abdicate. Whether good or bad, the numbers tell you how you are doing and what you can improve. They help you make good decisions that impact all areas of the business. A good accountant will gladly explain and teach you if you want to learn. Time to embrace the numbers. Successful business owners do!

RELATED ARTICLE: 5 Skills To Take You From Technician to Entrepreneur

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10 Ways To Create a Successful Business

When it comes to business, there are plenty of stats on business failures and why this happens. Knowing the potential obstacles certainly provides you with information that can help you avoid the pitfalls.  But since our brain works better with positive reinforcement, we’ll focus on what you can and should do to create a successful business.

When we consider business success there are two fundamentals that are obvious, so I have not included them in the list.  First, the business must have working capital so it doesn’t run out of cash and, second, it must have products or services that others want to buy at a price that produces a profit for the business.

With that said, there are certain things that stand out among successful businesses.  Based on my experience with hundreds of small business owners, here is my list of things to consider – to help you create a successful small business.

Have an Actionable Plan.  Writing down WHAT you want to achieve (goals) and HOW you will get there (actions or tactics) is a must.  As a small business owner, you wear a lot of hats and have a lot to do.  Without a roadmap, everything looks like a priority and the important stuff ends up on the back burner.  It doesn’t need to be long and fancy.  It simply needs to be clear and actionable.   Successful businesses have written goals with associated actions to get there.  My Ultimate Guide to Planning may help.

Think Long-Term Value.  It’s natural to look for ways to save money.  While it should be a priority in both good and bad times, you need to look at the big picture.  Are you creating short-term profit at the expense of long-term value?

Here’s an example to demonstrate this point.  When business got tough, a business owner laid off staff.  As the business recovered, he made a decision to fill some of his staffing needs with temporary help to save money.  Over the next year, service levels began to decline, customers left and his reputation took a hit.  He saved money short-term but it had long-term implications.  Think long-term value when making critical decisions for your business.

Focus on Results.  As a business, you invest a lot of resources in activities – from marketing and sales to service and team building.  But do you track or monitor the results to see what works and make adjustments based on what you learn?  Activities that don’t produce the desired outcome, like more sales, efficiency or profit, cost you time and money.  So whether you are trying a new marketing tactic, hiring a new employee or changing up your service delivery procedures, be clear on your desired outcome and monitor the actual results.  Your findings will determine if you keep doing it, make some tweaks or stop doing it.

Be a Lifetime Learner.  Entrepreneurs by nature tend to be self-confident.  Would you start a business if you didn’t believe in yourself and your abilities?  But none of us are experts at everything and sometimes we just don’t know what we don’t know.  Successful owners understand this.  They recognize their strengths and are willing to teach others what they know.  But they are equally willing to learn from others – employees, customers, business associates and mentors.  They are open to new ideas, willing to try new things and gladly give credit to others along the way.

Speak the Language of Business.  You don’t need to be an accountant or a math guru — but you do need to understand the numbers that drive your business.  Whether you do it yourself or hire a bookkeeper, Quick Books makes it easy for any small business to KNOW what is going on with your sales, profit, and cash flow at any time.  Have an accountant to help with tax preparation and strategic planning, but take ownership of learning and understanding your financials.  In doing so, you will uncover opportunities and make better business decisions.

Leverage Your Business.  You didn’t start a business to become a slave to it – yet many small business owners end up working lots of hours with little reward.  It’s important to simplify and get more done with a lot less effort.  The key here, of course, is systems! Documenting procedures and systematizing routine and critical tasks makes it easy to do or delegate what you do consistently, effectively and efficiently – so you get more done and make more money.  Systems also make life easier for you, the business owner, your team and your customers! They may not be glitzy, but they sure contribute a lot to the bottom line! My Ultimate Systems Guide may help.

Niche: Think Small to Grow Big.  Intuitively, most owners know that trying to reach and serve everyone is a costly mistake.   Today customers are more cautious about spending and often have more choices. To be effective, your marketing must be compelling to potential buyers.  How do your products or services address their goals, desires, and problems?  This is difficult to answer when you are trying to ‘talk’ to everyone.  But when you employ a niche marketing strategy – think small to grow big – it’s easier, more effective and ultimately more profitable!

Here’s where to start: (a) pick a product or service – most businesses have more than one (b) identify the niche or ideal customer for your product or service; (c) identify the problems experienced by those customers and (d) communicate the solutions your products or services offer for the problems they experience.  If you are not sure what the problems are, ask.

Create Profitable Growth.  New business is a priority for most companies.  But revenue growth will not guarantee you put more money in your wallet or bank account. Products and customers are not created equal.  If new sales are coming from low margin or unprofitable customers or products, profit can erode despite the top line growth.  If you can’t make a customer or product profitable, be willing to let them go!

Give Your Products a Facelift.  When was the last time you actually took a look at your products and services – beyond price?  The needs of customers change over time, technology and market conditions change too.   Are your products or services keeping pace?  Do you have opportunities to expand your offerings or reach new segments with minor adjustments?  Are value-adds still valuable to the customers you serve or are you simply adding cost without a return?  Which products or services are most profitable; which are unprofitable?   Successful businesses routinely make adjustments – they add, delete or modify to reach new customers and keep current ones coming back.

Create Raving Fans.  Getting new customers is important, but repeat business is the key to sustainable growth and profit.  Go beyond satisfying customers.  Make it your mission to create raving fans, who buy and spend more and tell others how wonderful you are.

It starts with their initial contact, so make the experience one they remember.  Follow up and do what you promise.  This alone will make you stand out.  Make continuous improvement a priority.  Always look for ways to better serve and wow your customers.  Stay connected, keep them informed and make them feel special.  Do you have a plan or formal method to do so or do you simply take action when you have time or sales fall off?  It’s a lot cheaper to keep customers than it is to ‘buy’ new ones and raving fans are the best advertisement for your business.

There it is.  Not rocket science huh?  In fact, I believe most small businesses have the potential to be better and stronger than they are today. Define what success looks like for your business then apply some of these strategies into what you do.  The results may surprise you.

New Monthly Article & Business Tools

For new business improvement articles, exclusive tools and insights on entrepreneurship, click here to subscribe to my monthly eNewsletter. When you do, I’ll also send you my free eBook, How to Build Profit Through Leverage.