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Scary business mistakes to avoid
According to a recent Global Entrepreneurship report, over half of businesses fail—usually the result of poor or no planning. Whether you have a new business or you are a veteran entrepreneur, here are a few tips to help you avoid falling victim to the following scary business mistakes.
1. Going it alone
For many people, running their own business is all about the freedom of working for themselves. However, just because you work for yourself, doesn’t mean you have to—or should—go it alone. Identify areas where you can use some help. For example, start with the financial side of your business. If numbers aren’t your area of expertise, working with an accountant to develop a proper financial plan can help keep your balance sheet in the black.
2. Failing to build a team you can trust
While it’s helpful to have people you can bounce ideas off of, it’s imperative to build a team of professionals that you can trust to help you run your business. This requires you to identify areas in need of support, such as sales, marketing or client services, and then recruit candidates with the right skill set to handle a given job.
3. Not having a current financial plan
This may be one of the scariest mistakes that business owners can make. If you haven’t done the proper planning, it’s exceptionally difficult to achieve your financial goals. A solid financial plan enables you to monitor the metrics critical to business growth, such as:
• Required capital to build and run your business based on your long-term goals.
• Level of revenue, profits and expenses you can expect within a specific time frame.
• Required capital to pay for outsourced services, equipment and other expenses.
Having a financial plan in place is one area where you don’t want to skimp. Hire a professional with the appropriate experience to support you here.
4. Failing to measure KPIs
Key Performance Indicators (KPIs) are specific data points that allow you to measure business performance (compared to goals) in multiple areas. Here are a few standard KPIs every business owner should pay attention to:
• Sales revenue
• Net profit margin
• Gross margin
• Monthly recurring revenue
Because every business owner will have unique goals, your KPIs may vary. This is why you want a seasoned financial expert in your corner.
Take steps now to avoid these scary business mistakes
If you have made any of the mistakes listed above, take action today. Start by identifying the most pressing issue and then make a plan to correct it—whether that means recruiting new staff or updating your financial plan. Here’s to your business success!