5 avoidable mistakes small businesses always make

Jurg Widmer Probst

5 avoidable mistakes small businesses always make

Jurg Widmer

Running a small business can be hugely rewarding – but it can also be a potential minefield for many. Here, we thought we’d take a look at just some of the most common mistakes made by fledgling businesses – and what can be done to avoid them.

  1. Not learning to delegate

What is the most valuable use of your time? As an entrepreneur or small business owner it can often be hard to know. You are the founder of the business, the one with the original vision – and it can be tough to take a step back and recognise that as your business grows, so your day-to-day involvement will evolve.

Take a sole trader – at the outset, naturally they will do everything, as there is no one else to do it. But as their business grows they may begin to hire people to take on different roles, whether on a freelance or full time basis. The critical mistake that many small business owners make at this point is that they don’t actually let these new people do their jobs.

So – once again – think about how you can bring the most value to your growing business. It might once have been a valuable use of your time to sort out an IT problem – but if you have since taken on an IT specialist, then let them do their job. It’s what you’re paying them to do, after all.

  1. Forgetting to market yourself

Just because you know that your product or service is incredible and an industry game-changer doesn’t mean that everyone else does. This is a truth that can actually be very hard to spot in the early days of your business – you are so focused on what you are doing that you neglect to invest the time and money you need to market what you’re doing.

You might understand that investing money in producing marketing materials, or paying a social media expert to put together an online marketing strategy for you, is an important job, but you’re also reluctant to pay for it right now.

Well, now is precisely the time to invest: marketing is a long-term strategy that will pay dividends further down the road, and failing to start early is a common mistake among small businesses.

  1. Not listening to customers.

To be clear – this isn’t a problem that is limited to small companies. There are plenty of big companies too that completely fail to listen to their customers, but they often have the resources to be able to absorb the damage it does to their brand and their reputation (in the short term at least).

As a small business, you don’t have that luxury. Your customers are the single most valuable part of your business. Think about it – they buy your products and provide you with an income. They talk about the great experience they’ve had with you and give you free marketing. They tell their friends about how your product or service has changed their lives, and in doing so, do the work of a paid team of business development executives. And finally, just like the best research and development team that money can buy, they tell you honestly what you’re doing well and where you can improve.

They do all of this, and they contribute to your cash flow at the same time. Why wouldn’t you listen to them?

  1. Poor recruitment

Bringing in the wrong people can be hugely damaging to a growing business, financially and culturally. Our big piece of advice here is that it often pays to simply to focus on recruiting forĀ  personality rather than ability. Of course, that doesn’t mean you should hire someone because they’re good fun to have around the office, regardless of their ability to do the job.

Rather, we mean that it is important to consider the way that the new person will fit into the team you are building. How will they affect the team dynamic? How will the other team members feel about the new person? And most importantly, will they fit into the general culture that you are trying to create within the business? Chemistry is absolutely critical in a small business because it can directly effect every aspect of what you do together. Get it right, and your business will fly.

  1. Failing to put it in writing

Another common mistake many small business owners make is failing to formalise agreements. This is a particular issue for young businesses, where things might develop organically – people might start working together in an informal way, sharing things on trust and assuming that the other partners will do right by them. And, it often works out – but when money is involved it can often not.

So, our advice is to formalise any agreements you have – whether with business partners, employees or suppliers – before things start to get complicated.

Jurg Widmer Probst

 

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