Stories of how tech companies launched from garages or closets became multibillion-dollar entities have become the new gist. The Small Business Association (SBA), however, has some more sobering statistics. It reports that about 1 in 12 businesses close each year, with only about 1 in 3 companies still operating after ten years. With these challenges, it’s essential to take lessons from other businesses’ mistakes without learning the hard way. Read on for the eight mistakes that can seriously cost your small business.
- Undesirable Business Location
- Poor Marketing Strategy
- Poor Customer Service
- Spending Too Much Time Planning
- Failing to Document Transactions Properly
- Uncompetitive Pricing
- Lack of Innovation
- Uninformed or Ineffective Management
Undesirable Business Location
As the saying goes, location is everything. This saying is true in the business world. Other things being equal, moving to a better venue may hold some attractive benefits for you. Do you find it challenging to get your products across to ideal customers? If you have set other things in place, your location may be the culprit. Your ideal customers may be finding it hard to locate you in the first place. So, the solution to that long-standing problem may be a location change.
Making the mistake of being in a wrong location can snuff life out of your business. The sad thing is that your business may keep gasping for breath every single day until it finally breathes its last. If your business depends on drive-by customers, pedestrian foot traffic, you don’t need a detective to tell you the best location will be in a place with many car owners and dense traffic.
It would be best if you located your business such that it irresistibly pulls customers. Another location hack is to place your business location beside other existing and thriving businesses, like a shopping mall. When people come to shop for other things in those areas, chances are they will notice your business, increasing the chances of them doing business with you. In all, make sure your business remains distinct, visible, and easily noticeable.
Poor Marketing Strategy
Even with the best location, you still need a means of getting customers through the door. This is where an effective marketing strategy comes in. The marketing strategy you use will impact your income and other business expenses. Poor marketing strategies may produce so-so results and can cost you a fortune. Try to take a closer look at the effort you’re putting in and explore other available marketing options.
Carefully analyze and examine what profits you’re getting from your current marketing strategy. It may be time to change to a new plan or to try some other marketing options to find new ways of reaching your audience more effectively. Also, you should take into consideration your marketing pitch. While you may be using the best methods to gain your audience’s attention, they may be neglecting your business if you use the wrong pitch.
Poor Customer Service
Nothing harms a business like poor customer service. Poor customer service can stab your business in the chest and watch it bleed out. Imagine the effort you put into bringing customers coming to waste because your company doesn’t know how to please customers?
When a company does very well in customer service, it can easily promote referrals, encourage customers to buy again, and foster long-term customer loyalty. What else does a business need to thrive? When you invest in quality customer service, you can rest assured of generous returns. By simply remaining in contact with your customers and responding to their needs before and after a sale, you can cement their commitment to your brand.
Keep in mind that poor customer service can warrant your customers not returning to you. Unsatisfied customers can also spread the bad experiences they had with your company to others. This is something you would want to avoid like the plague. Do all you can to ensure that the majority of your customers are willing to recommend your business. A buyer can and may check the satisfaction level among your customers before approaching you.
Spending Too Much Time Planning
While your business can fail from malnourished planning, it can also fail from too much planning. Spend too much of your time obsessing about the details and you may end up planning yourself out of business even before you start. The key is trying not to miss out on opportunities because of poor timing. If you plan using too much time, your clients’ needs and preferences may evolve considerably before you eventually agree to execute it. It’s painful to watch all your effort turn out to be irrelevant and other things going down the drain.
When you try to chase perfection, it can lead to lost opportunities. A way to go around this is to launch your business or marketing strategy as early as possible and adjust to your clients’ feedback accordingly. You can always refine your plans as you go along with a focus on the responses of real customers.
Failing to Document Transactions Properly
As it is often said, a verbal agreement isn’t worth the paper it’s written down on. This is true in all circumstances where some form of remuneration or financial consideration is involved. Whether you’re dealing with a close relative, a friend, or a stranger, you need proper documentation.
This is particularly true of how business startups get funding and work. Usually, they have all the budget terms and conditions on paper. Your documents should clearly state whether the funds are considered as a loan or as equity. More importantly, it would be best if you decided whether the fund source has the option of becoming involved in the administration and management of the business. Their direct involvement is something you should generally avoid.
Uncompetitive Pricing
Even when you have taken the pain to do everything else right, uncompetitive pricing can still harm your business. The chances are that you don’t run a monopoly – you have competitors front, left, right, and center. When you set your pricing too high, customers who do comparison shopping may decide to do business with your competitors.
However, very low pricing also comes with its share of problems. You may find yourself under the pressure of keeping up with demand without making profits. Low pricing may also make some customers doubt the authenticity of your products. The most important thing is that you know your customers and plan perfect pricing that suits them.
Lack of Innovation
It is no news that we’re in an era where everything rapidly evolves even in the business world. If you’re not continually coming up with new ideas to improve your services and products, you will be left behind. Your business company will become stale, monotonous, and boring. If you keep on innovating, you will surge ahead. Take some time to think about the new things you can do to draw more attention to your business and serve your customers better. Your opportunities are endless – make innovation your watchword!
Uninformed or Ineffective Management
A frequent cause of business failure is that owners and managers do not create business systems and processes to effectively carry out their organization’s mission, strategy, and goals. With poor or ineffective management, you can drag your business down. It would help if you had people who are deep thinkers and results-oriented. Employ people who can help you create and maintain a culture of excellence.
So here we are! Eight mistakes that can harm your business! Avoid these eight mistakes like the plague, and you will begin to see a massive turnaround in your business.