When you run your own business you are working day and night to ensure it continues to grow, but you could be throwing money away without knowing it!
Here are the top five mistakes a small business owner will make that cost them BIG:
- Picking the Wrong Partner: The right partner is one who can complement your areas of expertise in order to form a well-rounded management team. Often, entrepreneurs reach out to spouses or other family members to serve as partners, an idea that can be deadly if bickering results. In 2003, U-Haul went bankrupt for just this reason. To play it safe, don’t blur the line between your business and personal relationships.
- Becoming Distracted: If you are spread too thin, you might have trouble maintaining a high level of attention to any one area of your small business. With too much attention to operations, your sales will suffer. Too much attention to sales, and your operations becomes inefficient and riddled with mistakes! A solution may be to delegate some control to trusted partners or associates. Have a team you can trust to report back to you on important updates and issues, so you can still handle them personally, while running the other areas of your business.
- Mismanagement of Inventory: At first glance, when you are running low on inventory, you may think it is great and that products are so good that they are bought right away! WRONG. When you are low or out of inventory your small business is losing money from the potential sales. However, on the flip side, too much inventory can mean you are giving it away when you are trying to clear shelves. Inventory management can make or break your business, so it is important to start collecting data and put the time into understanding this area of your business. Keep track of sales so you can analyze your data from year to year and understand trends.
- Not Trusting your Team: You have some secrets you’d rather not share with your partners, associates or consultants? Not the best idea. When you hold your cards too tightly, you fail to get important advice that can help you succeed. Instead, use non-disclosure agreements so you can talk freely with those you’ve trusted to help grow your small business. When you are able to discuss the obstacles you are facing, you never know what partner or consultant may be able to offer the advice that saves you hundreds or thousands!
- Running Short on Working Capital: It’s like running out of oxygen – terrifying and deadly. Without sufficient working capital, you can’t pay your vendors, buy inventory or pay yourself a living wage. If you don’t have sufficient funds to buy inventory, update equipment, or continue marketing campaigns, these are all going to have big effects on your revenue. Consider a small business loan from an alternative lender to ease any variance in cash flow. This ensures you have the funds to continue running your business smoothly.
When it comes to any mistake a small business owner can make, the common denominator is always money. Today, money should never be an excuse for a dip in sales.