5 most common small business mistakes

We see these every day, but it is not difficult to correct these mistakes. The starting list from News Ltd:

1. You don’t charge enough

Small Business advisor Andrew Griffiths says this is more common than you’d think.

“Many businesses simply don’t charge enough,” the author and advisor says.

“In fact they will never be able to make a profit because they don’t charge enough.

“The reason tends to be a lack of confidence when setting their prices.

“Sell on quality, sell on service and sell on your knowledge and expertise.”

He says pricing needs to be well thought through, it needs to be realistic and it needs to still be appealing enough to prospective customers.

“Simply charging a little less than your competitors is not really a strategy and it can lead to disaster,” he says.

“Of course the key to charging what you are worth is to make sure you deliver on your offering.

“If you charge a lot and don’t deliver, your business won’t be around for long.”

2. You don’t understand the financials

Most small business owners cringe when you start to talk about finances – how much money is their business making or losing, how much do they owe, how much are they owed?

Griffiths says the reality is that if a business owner is not across the finances of their business, it is very easy to get into trouble – and many do.

“As a bare minimum it is important to know how much it costs to open the doors, meaning how much does it cost each day to run the business?” he says.

“This needs to be measured on a daily basis against how much income the business generates.”

He says successful business owners need to know their financial position at any time.

“Generally this means having a good bookkeeper and a proactive accountant and a business owner who works closely with both,” he says.

3. You stop focusing on your customers

When a business first starts, every customer is vital and hugely valued. Over time, as a business grows, the business owner can start to become preoccupied with other aspects of the business, which can result in a generally lowering of the overall level of customer service.

“Customers need to be treated as the main priority of any business,” Griffiths says.

“This means making sure that they are always treated with respect and that staff are trained to deliver high levels of service.

“Any business that offers great customer service will generate word of mouth – and word of mouse – referrals.”

4. Business owner burnout

Most businesses reflect the business owner. A tired, worn out looking business generally reflects a tired and worn out business owner.

“This is a state that doesn’t appeal to customers and it tends to be a precursor to the business closing down,” Griffiths says.

“Fatigue and burn out are very common amongst business owners who tend to work very long hours, especially in the early years of a new business.

“The business owner is the most important asset within a business and they need to be managed accordingly.

“This means staying healthy by eating well, exercising, taking time out.

“There is never a good time to take break in small business, but it is essential that the business owner does.”

5. You have a hit and miss marketing strategy

Griffiths says too many businesses have a stop-start approach to their marketing and business development – stopping when they are busy and then desperately starting again when things slow down.

“This simply doesn’t work,” he says.

“The marketing you do today is an investment in your business for tomorrow. “It needs to be done consistently, regardless of how busy you may be right now.”

In fact, Joe Bowers from the Small Business Authority, says you need a system and strategy for everything.

“Everyone knows about the importance of systems and yet in our experience many small businesses still haven’t got there,” he says.

“Why isn’t your marketing achieving what you want? Because you aren’t using a proven marketing system.”