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Classic Small Business Mistakes               


Small businesses are the backbone to almost every country’s economy. Collectively, they employ more people than mid-size and large corporations, they generate more patents per employee than large corporations, and they are the means by which immigrants generate income for themselves.

However, a significant amount of small businesses either dissolve within the first 2 years of operation, or they can never progress their business towards becoming a larger organization. There are several reasons why this is so. 

Mistake #1: A lack of tech 

There are still businesses in 2Kx that lack the technology to compete and be efficient. I had a landscaper that I used for years. We weren’t friends, but I really liked the guy and we had a great relationship. But, the one thing that bothered me about his business was that he did not take digital payments. A simple Square or Paypal device to plug into his phone to allow for card payments would save clients a lot of time and effort. I had to always know when he was coming to service my lawn so that I could give him cash. And on days when I missed him, he would leave an invoice in my mailbox. As a person in my mid-40s, I check my mailbox maybe once a week as all of my “relevent” mail comes to me electronically. Thus, when I get paper invoices, it takes me forever to pay them.

I have had similar issues with small business contractors that come to do house renovation work. They do not operate using electronic payments - all of their accounts receivables processes are straight cash or check. Who writes checks in 2Kx aside from Baby Boomers?

Technology dominates everything we do in life. If you cannot run a business with technology incorporated into it, you are not going to be in business very long.

Mistake #2: No marketing

Small businesses do not leverage the power of social media. Just like their business, their network is small or non-existent; thus, not many people know that they exist.

Similarly, they do not put any resources into marketing and promoting their business. They do not create flyers, online marketing ads, or run radio and television promotions to advertise their product.

Marketing and promotion not only announces to the world that you exist, but it legitimizes your business. Small businesses can start small with marketing and promotion concepts. Track how those promotions have helped you grow your business, if at all, and adjust your marketing and promotion strategies accordingly.

For small businesses, one of the best, and possibly free, marketing strategies is to reach out to community associations that are in the neighborhoods that you service. Community Associations usually hold routine civic town hall meetings to discuss neighborhood issues such as crime, public works issues, community events and so forth. Reach out to these community boards and get your business on the agenda to speak to the community group. For example, if you are a landscaper, get on the agenda to talk about steps that residents can do, themselves, to properly care for their lawns. If you own a bakery shop, give tips on cooking advice and recipes for the holiday season. Do not make your presentation about your business directly, but plug your business at the beginning of your presentation and end your presentation by offering your services. Also, bring supporting material - hardcopy printout of your presentation or business cards - as a “take-away” for the attendees.

Mistake #3: Acting like an employee  

A lot of small businesses cannot transition to being a mid-size or larger organization because the owner acts like an employee and not an executive. In the business’ infancy, the owner may need to be hands-on in running the daily operations of a business. This may involve the owner preparing food, sweeping floors, and taking customer orders. However, at some point, the owner has to gradually work themselves out of the mundane activities of the daily operations of the business and operate at a higher, strategic, level.

After assisting with the daily operations of the business, the owner’s next steps should be to operate from a managerial perspective. They should transition from assisting with the aforesaid chores to delegating tasks to employees while they manage staff and scan the business environment for opportunities and threats. Then, the owner should look to transition from managing the business to hiring someone to manage the business for them. The person that they hire should now be delegating the business tasks and conducting environmental monitoring and control of enterprise opportunities and threats while the owner focuses on business proliferation. As the owner expands the business’ footprint, the final step should be to hire an executive that looks to grow the business - or manage its growth - while the owner routinely checks in on the financial and functional health of the firm. At this point, the owner’s time is freed up to start another business venture, or relax and enjoy continual income from the business.

Mistake #4: Lack of  partnerships 

As a small business, resources will be scarce. Sometimes, as a small business, you have to pool your resources with like-minded or complimentary brands in order to advance your business objective.

Similar to small businesses failing to market and promote their brands, they fail to partner with media influencers that can help their brand achieve the level of awareness it deserves. You may not have the time or skills to effectively market your business, but brand influencers have the skills to do so, and possibly the time.

For service-based organizations, there may be large contracting opportunities for your business to acquire; however, you may have to partner with other small businesses to show that you have the resources and skills to compete for the bid.

Partnerships are critical as a small business. Leverage partnerships as often as you can.

Mistake #5: Reliability 

In my experience, small businesses are small because they are not dedicated to their craft; thus, their lack of dedication comes off as the business being unreliable from a consumer perspective.

Being in the real estate game, I have had several contractors show up on day one to start the job but, by day 3, they have excuses for why they cannot make it to the jobsite. Sometimes, they do not even call - they just go missing until you are able to track them down. The job that they estimated would take 4 days turns out taking 14 days because they fail to show up.

In today’s digital age, where information is ubiquitous on the Internet, businesses cannot afford to be unreliable. Customers will know about other consumers’ experiences with you.

Mistake #6: Process inefficiencies

Finally, small businesses put very little, if any, effort in perfecting their business processes. Business processes can either consume a significant amount of time, resources, and money from an organization, or they can save a business a significant amount of time, resources, and money. By continuously scanning how your business operates, and eliminating redundant or inefficient processes while standardizing where applicable, businesses can establish repeatable business processes that allow it to operate in a manner that saves time, money, and resources. Businesses can improve supply chains, manufacturing and development efforts, and can service customers more effectively and efficiently.

Business process optimization helps organizations free up time to focus on expansion of the business. And smart business expansion is how small businesses become large corporations.



 
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