5. Not marketing your business.
If we were to dial down marketing to its simplest form, it is simply communicating the value of your product or service to relevant audiences. Imagine, if you were to stop communicating that value?
In contrast, there is a saturation point. A point of diminishing returns where an extra dollar invested won’t yield incremental value. But not understanding the best ways to market your business is not an excuse for not doing it at all. Think of marketing as a scientific experiment; conducting controlled tests to gain desired results. The tests that produce results can be ramped up on a larger scale.
6. Ignoring financial statements.
If you’re like me, not a financial analyst by trade, you can appreciate reviewing cash flow, P&L and balance sheet statements, but you’d rather not be the one compiling them.
If this is the case, you should do one of two things: roll up your sleeves and learn accounting 101 or outsource accounting and bookkeeping tasks to a qualified professional.
Finances are the life-blood of your organization. If you start too late, you don’t have YoY historicals to compare and you could be harboring hidden cash flow traps. Get comfortable with your company finances — the earlier, the better.
7. Not saving for a rainy day.
Things happen, natural disasters hit, some months are slower than others. This is why it’s important to set some money aside for a rainy day. How much cash should your company have on hand? That depends.
First, brush up on financial metrics every small business owner should know. Then consider this: “Cash offers protection against tough times, and it also gives companies more options for future growth,” according to Investopedia.
In theory, you should “keep just enough cash to cover interest, expenses and capital expenditures; plus a little bit more in case of emergencies. Your company’s current ratio and quick ratio can help to determine your [cash position].”
8. Asking business advice of unqualified people.
If I want to buy a business, I’d consult a business broker. If I need legal advice on trademark infringement, I’d consult an intellectual property attorney. And if I want advice on whether or not I should sell a stake in my company, I’m not going to ask my neighbor Bob. Why? Because Bob, while he’s intellectually gifted, has never owned or managed a business – let alone a lemonade stand – in his life.
An essential key to developing a sustainable company is to know where to go to get the right answers. Today, there are a multitude of resources at your fingertips to gather the best business know-how and move forward intelligently. If you haven’t yet developed a solid network of talented peers with a particular set of skills, start connecting with like-minded entrepreneurs today.
9. Being reactive instead of proactive.
“Did you see that?!”
“Our competitor just took out a 2-page spread in Mind Your Own Business Weekly!”
Whoa, quick draw! Before you react too quickly and speed dial the magazine’s ad sales department to trump your rival, step away from the phone and consider this: What’s right for one business may not be correct for yours. Furthermore, tactical observers aren’t always privy to the strategy behind a competitive move.
Instead, refocus on your business vision, ensure your tactics are tied to a strategy that is congruent with the brand you’re building in the marketplace and then consider next steps. Your unique business situation deserves more than an afterthought.
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