If a corporate giant makes a mistake, we see it in the headlines for weeks. When small businesses make mistakes, we see it in the form of “For Sale” signs or company takeovers. Owning a small business can be an extremely rewarding experience. If successful, you can end up passing it down for generations or it may expand beyond what you thought possible.
However, there are many hurdles that can get in the way of that success, and for small businesses, it can end up being a make or break issue. Staying vigilant and preparing to battle the worst-case scenario can save your business, especially now when things are unpredictable. Let’s take a look at some of the common mistakes small business owners make, and how we can learn from them to be proactive.
Improper Planning
The first and biggest mistake small business owners tend to make is failing to plan. Developing a strategy from the ground up will give you something to look back on when you’re not sure of the next step.
A good business plan will guide you as you start your business and grow. It needs to be developed before you begin operation, as it is the foundation of your business. There is no right or wrong way to write your business plan, so long as it meets your business goals and needs. Most businesses end up following a traditional business plan:
- An executive summary
- Company description
- Market analysis
- Organization and management
- Service or product line
- Marketing and sales
- Funding request
- Financial projections
- Appendix
In a competitive market, constant growth is necessary to stay afloat. Without a business plan, the common hurdles that may arise during regular operation can take more time and resources to solve. Update your business plan regularly to adapt to your business’ growth and to identify new opportunities. As a decision-maker, be confident in your plan and don’t be afraid to seek advice.
Adapt or Die
As mentioned before, your business must evolve constantly. The idea of “adapt or die” is hardly new, yet some companies don’t do enough to adapt and can’t keep up with the competition
As a result of the COVID-19 pandemic, 43% of small businesses temporarily closed. Recently they were given the go-ahead to reopen but with strict measures in place. This whirlwind of direction has left some business scrambling to stay afloat and meet the needs and expectations of their customers.
There are many ways your small business can adapt to the changing times. Keeping up with the latest technologies is a start, as your customers will probably be adapting in some way or moving to competitors that embraced the change. An example of this is installing credit card terminals as many people don’t carry cash anymore.
Keep Employees Happy
Lastly, businesses must protect their employees to keep them happy. To retain talent, you must fight for them when necessary. It’s well-known that in order to attract employees, you must offer a competitive benefits package and also incentivize various programs to increase productivity. However, to retain them, you must find ways to keep them happy.
Making sure wages are fair is one way to keep employees feeling valued at your company. If your wage system is questionable, you may end up with dissatisfied workers and potentially upset customers due to a lack of employee engagement. This was the case with DoorDash, a food delivery service, whose employees revolted against weak wages. Had the business listened to their employees and taken care of this ahead of time, the issue wouldn’t have escalated.
By doing your part as an employer and listening to your employees you will nurture a more productive workforce that works effectively towards the company’s business goals.
Inadequate Management
Another reason small businesses fail is poor management. Oftentimes the owner is the only senior-level person. This is most common in the first years of operation. However, this can be a hindrance to the growth and development of your business.
A great small business manager must have sales skills as well as leadership skills. Hiring other managers to work alongside the owner will help prevent mismanagement. If you as a business owner are aware of what skills you lack, you should learn to outsource and delegate. Don’t be afraid to hire people who are better than you – it is the only way to grow.
Operating a small business can be tricky, but having a solid plan makes it easier. Mistakes are inevitable, but also valuable if you are ready to learn from them. Follow the competition on social media, read the relevant press – learn from other people’s mistakes when you can. Being a small business owner can be an extremely rewarding experience if you’re up for the challenge.