The ten biggest mistakes made by SMEs

Katherine Evans, PR and marketing executive at 08 Direct, looks at how the main pitfalls of running a small business can be avoided.

Starting up and running your own business is somewhat of a minefield, so you have to have a certain degree of courage if you’re going to go it alone and successfully dodge the danger zones. The past few years haven’t been exactly kind to business and there is always a strong possibility of making mistakes when running a small company. 

While it’s important to not be afraid of making mistakes, taking risks has often accounted for some of the most successful business decisions in today’s market. There are many traps that are so easy to fall into, yet just as easy to avoid.

Here are some of the top mistakes made by small businesses today, and we’ve suggested the best ways to ensure businesses are able avoid making them:

Not having a business strong plan

Most businesses begin with an idea and a plan; this provides the foundations for the business, setting them off on the right foot, in the right direction. It provides the guidelines for all the future work that the business does, providing a set path for business growth. If you don’t have a comprehensive plan to begin with, your business will be more of a shot in the dark. It’ll be easy to go off on a tangent and lose focus of business goals, letting your business suffer.

Not understanding finances

Money is something that needs to be monitored very closely in business. If you spend carelessly, allow customers to rack up huge debts and don’t allocate budgets for various areas of your business, it will be all too easy to lose track and soon have no money left. If you don’t know what you’re doing with your finances, find out or enlist expert help, it’ll be one of the best decisions you make.

Not having a marketing strategy

You’ve got your business, now all you need is customers. If you don’t have a marketing strategy, or no plans to market yourself at all, people aren’t going to know, or care, that your business is around. Take a look at your competition, outsource your marketing or simply do research to find out the best ways to market your business and where. Remember, it doesn’t have to cost the earth, social networking is one of the easiest ways to raise awareness, and it’s free. The more people that know about your business, the more potential customers you have.

Overworking

Ok, so it’s crazy to think that you’d actually turn down business, but imagine you have a sudden boom in business but not enough staff to fulfil your commitments; who will suffer? The customer, that’s who, and they’re the ones who shape your reputation, so ensuring that every bit of business you take on can be completed on time and to the customers’ satisfaction. Know your limits and don’t promise what you can’t deliver!

Hiring the wrong people

Choosing a new staff member is always going to be tricky; what it says on their CV could be very different to what they’re actually like in the workplace. When hiring, consider their personality, will they fit within your business and your existing team? The status quo in the workplace is important, and bringing in someone who doesn’t gel won’t help! Also, consider their qualifications and capabilities; will they be able to handle the job? Find out as much about your prospective new employee before signing any contract.

Not taking advantage of technology

Technology is now so developed that there’s usually some kind of technical device that aids most areas of business. Be savvy with what your business needs are and what technology you invest in, only get what you need. There’s no need to spend money on technology that won’t get used.

Not considering your competition

The marketplace is saturated with all kinds of businesses, so it’s likely that you have competition. Ignoring your competition could mean bad results for your business, as you don’t know what you’re up against. Do research, find out what your competition offers and work out how you differ, make it clear why customers should choose you over them.

Setting unrealistic goals

Ambition is one thing, but reaching for unrealistic goals could mean bad news. Be aware of your business capabilities and its demand, be realistic. If your business is seasonal, don’t spend thousands of pounds on marketing out of season, it’ll just go to waste. Ensure your pricing is right, too high and you’ll alienate customers, too low and you won’t make any money!

Poor customer service

From the very beginning of any business, reputation is the one thing that needs to be built to ensure an organic growth in your business and customers are the ones that will promote this. Customers are more likely to tell their friends and family about a bad experience than a good one, so make sure you always provide high quality service.

Forgetting your passion

You started your business because you had a passion for it; you wanted to provide a service or product that you loved. Try not to get bogged down in the ins and outs and remember to enjoy!

Further reading on business management

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