By K. C. Soares, ContributorYOU HAVE formed your company, borrowed the necessary funds to get started and your small business is now up and running. You have satisfactorily completed the recommended budgeting exercises and you expect to be successful. Everything appears to be in place and you expect smooth sailing hereafter.
However, to ensure your continued success there are some small business mistakes that one should avoid.
To begin with, one should not get stuck to a single idea. Ideas are commonly referred to as the currency of entrepreneurs. It is advisable to experiment with many ideas and see which ones bring money and success. If things are not working out do not keep doing the same things and expect to get different results.
It is important to know your customers well. Lack of knowledge of your customers can in no time bring closure to your business as changes in their preferences will reduce, or may even totally eliminate the demand for your goods and services. You should know what your customers want now, what they will likely want in the future and what are their buying patterns. Once a customer is assured that he can always get what he wants, at reasonable costs, he will keep coming back to you.
Many small businesses are started with very limited cash or inadequate collateral. In situations like these it would be a mistake to ignore one's cash position. There is what may be termed a gestation period, which all businesses go through. This is basically the time frame within which customers respond to the goods and services offered. During this time, the business needs cash for its sustenance. It is therefore advisable to have plenty of cash or, alternatively, a generous banker.
A common mistake that is made by many small business operators is the act of trying to do everything themselves. You might be the key to everything but you cannot do everything and grow at the same time. Even modest success can overwhelm you unless you hire the right staff and delegate responsibility. A businessman or businesswoman who tries to do everything will spread themselves thin and, over a period of time, become inefficient and ineffective.
EMPLOYEES
A mistake that some small businesses make is that of ignoring employees. Motivating, training and managing staff members is probably one of the toughest challenges facing a small businessman. Lack of patience, persistence and "people skills" can quickly multiply one's problems. Morale, productivity and most importantly profits, can easily be destroyed. A simple compliment when one does a good job goes a far way. The act of entrusting responsibilities to employees is a motivating factor for many. This does not mean that the businessman or businesswoman should indiscriminately put their trust in all members of staff. The individual, or individuals being considered, should exhibit the necessary aptitude.
Some small businessmen and businesswomen make the mistake of paying their employees more money in an effort to motivate them. This will not work, as money is not a motivating factor. The more money you pay an employee usually does not bring out the best in her. What will bring out the best are recognition of the good she does, the giving of responsibilities, the nature of the job itself and if there is scope for advancement in the company. These are the motivating factors.
Another mistake that is made by many small businessmen and businesswomen is to think that they have all the answers. It is advisable to get a board or at least a mentor. Some may consider this suggestion ludicrous as what we are dealing with are small businesses. It is not. The board I suggested can be made up of family members that you trust or even close friends. Ask them to be your board of directors and you should review your business plans and results with them. Having someone to bounce ideas off and get an objective opinion is critical.
Finally, it should be remembered that some of the most successful businessman and businesswoman failed several times before doing extremely well. If you should fail at first, you should try again. Do not make the mistake of giving up. Failing should be considered a learning experience and with this new wisdom one should try again.
If the above mistakes are avoided there is every chance of your business not only succeeding but showing growth year after year.
K. C. Soares is a former banker and is now a business consultant with Soledad Financial Services Limited.
E-mail: soledad@netcomm-jm. com.
