We can become stuck on the idea of success in business. When we are so determined to become successful in every single, way we soon reprogram our way of thinking to believe that success is the only way, and that failure is never an option. But if your business is stuck, you will always benefit from learning from your mistakes. We can see so many other entrepreneurs that have made it and are being seemingly successful on a constant basis, but even those that have achieved success have still folded at some point. So here are some of the most common business mistakes that have been made and if you have experienced some of these, know that you are not alone.
Hiring the Wrong People
Issues in the IT sector are common business mistakes. Sometimes, we can like a potential candidate based on a few personality traits, but we overlook so many red flags, including missing skills. We always have to remember that when we’re hiring people, we’ve got to bring people on board that are smarter than ourselves. We are playing the game of chess, but they act as the pieces. And this means that we’ve got to remember that every component is there to help us so we have to make sure that those aspects are right the first time.
Whether you need to use an IT support company to help you with your technology or have external legal support to help you during complex business times, you always need to have the right people on board. And this means that, regardless of the situation, you’ve always got to have in mind what you need from the ideal person and when you start to create a “lust list” of the things that you need in a certain department or to help you navigate a specific problem, this gives you a lot more clarity.
When it comes to hiring somebody you need to create job postings that fit what you need in your candidate but also align with your company’s culture. As easy as it would be to copy another company’s job description, you have to ask yourself what you need from the right people. And when you are going through the hiring process you have to ask for references and follow the map, especially as a small business.
Not Understanding Who Your Best Customers Are
So many companies think about acquiring customers as a numbers game, but you have to look at the quality rather than the quantity. This means that when you are going through the marketing process, you’ve got to delve deep into your demographics and use analytical tools to ensure that you are getting the best bang for your buck. Identifying who your best customers are is not just about who is buying your product, but it’s about finding those who you really find it easy to work with.
Customer service doesn’t just mean the ability to retain a customer but it’s also about finding the right customer personas that you keep revisiting. Your ideal customer is not one type of person. They can fit a certain number of criteria, however, you have to understand that when you are finding the right marketing personas, these customers are going to evolve. So ensuring that you have the opportunities to create and share feedback on these marketing personas means you can alter your marketing efforts appropriately to can bring in the right prospects that match your ideal personas.
Misunderstanding Your Finances
Small businesses struggle with finances for many reasons. It could very well be a lack of insight into monthly expenses, having the wrong software or approach to the accounting, but one of the biggest misconceptions in terms of finances is neglecting the importance of working capital. If you don’t have the working capital you are not able to grow your business or even pay your employees! Identifying how much working capital you need, in addition to what you already have helps you to pinpoint what will benefit your business more.
Time and time again, businesses look at what they have and aim to maximise it rather than expand to meet the needs of the business. Many companies try to go via the bootstrapping approach, rather than opting for a business loan. However, a bootstrapping approach may seem somewhat romantic because it involves the business owner doing it all themselves, the reality is that if you get a business loan you can still maintain ownership over your business rather than options where you are looking for outside investment. There are plenty of approaches to gaining extra finances, but when you start to become more aware of your working capital and what you can do to meet your vision, this can help you to focus on the business rather than the finances.
Overspending on Your Marketing
Marketing is such a vital aspect of getting customers but in any industry, if you fall foul of using pay-per-click at the very outset, you can quickly run through your marketing budget. Marketing involves choosing a handful of components that can deliver consistent results. Some people automatically go via Facebook Ads or Google Ads and kick back, thinking it will deliver them everything they need, but a lot of the time this can result in a lack of the right customers.
Instead, you need to look at your return on your investment and conduct small tests to give your business the best chance of getting the right people. Make sure that you allocate a small budget to testing two or three marketing channels and track the conversions to ensure that they are helping your business profit. Because as we said, your customers going to evolve, so rather than thinking a certain demographic is always a sure thing, you are better off understanding how you can evolve your campaigns with your customers.
Selling Yourself Short
Many businesses believe that they need to be competitive in such a big market. Naturally, one of the most important areas to focus on is the price of your products. However, this can be a major mistake small companies have at the very outset. They believe that they want to be prominent in a market so, therefore, they start to sell the product way below what they should have charged. When you charge what you believe your product is worth, you may want to tack on 10% to this but additionally, you also may want to test the waters and look at how certain pricing strategies can increase your profitability.
Because if you increase the prices of certain products you may very well see a better quality of customer. However, if you start lowering your costs, this means you are going to have wider access to the market at large, but you are more than likely going to attract people who will devour your customer service resources. You may think that customers are always looking to pay less every single time, but the reality is that when people are paying for a product they are looking for the value in the entire brand. This does mean improving your customer service support for something that may form part of a luxury brand, for example, but in doing this, it means you are going to get a better profit while also working with fewer customers. You might think that customers that pay top dollar are going to be hard work, but actually many customers who are willing to pay more money are usually easier to work with.
Refusing To Change
Many businesses stick to the course they are on. But there are things that will force you to adapt. For example, changes in the economy or competition will force you to make alterations to your company.
When you refuse to change, you are doing yourself a disservice, but it is also a very slow and steady decline. You have to pivot according to the product or the customer. And it’s a valuable survival skill for any entrepreneur to have. One of the best things you can ever do is to go back to the drawing board and look at your business plan, this can help you see possible mistakes and fix them. When you refresh your business plan and look at how it is working in the current climate, you may find that slight adjustments can be to the benefit of everybody.
We are all capable of making mistakes. When we start a business, it can be one of the toughest things we will ever do, and mistakes will be common. The fact is that every business owner will make mistakes, but the trick is about being aware when something is not working and making the appropriate steps to fix them. The fact is that you may think that you are plowing new ground, but when something is not working, it’s likely to have been experienced by entrepreneurs hundreds of times before. Failure is one of the biggest lessons we can all experience, in business and life. And if you are able to recognise and fix problems promptly and practically, you will have a habit that will see you through the toughest of times.