Many people believe that once they have established a profitable small business their job is done and the business will then look after itself. It’s time to sit back and relax and milk a good concept. Of course, this attitude can be a guaranteed path to ruin. It has often been mentioned that as many businesses will fail in the growth stages of their life cycle when sales are rapidly increasing as when the business is still in its start-up phase.
Here are some critical business mistakes to avoid:
• The essence of small business success is the ability to identify new opportunities and respond to them quickly. Never forget this or assume you can slow down the pace and process of finding business and increasing sales. Such business mistakes happen to large companies, which eventually leads to their decline.
• A major element of small business is built on remaining focused, doing one thing well. Small businesses that achieve success often assume that they are infallible and begin to diversify into other businesses that they know nothing about. More likely than not, these new ventures produce mistakes and losses that bring down the original business.
• Many studies of business success indicate that the key to long-term success is to be flexible, adaptable and responsive to the changing requirements of the market place. Once businesses achieve success, they usually create procedures, standards, manuals, rules and processes that tend to become far too rigid. “It’s not our way or our system” is another way of saying the customer is wrong. This type of attitude creates mistakes and leads to business suicide.
• The company management begins to believe that it needs complex systems once systems people are hired. These staff begin to build systems that are “user friendly.” This usually means “systems user friendly,” but rarely friendly for the end consumer or the customer service representative. Allowing a technophile to lead the process of improving customer service is a big business mistake and a guaranteed path to ruin. Systems people believe everyone is like them and it is bad to let outsiders in on their jargon or knowledge. They make the systems incomprehensible to any other department and establish an adversarial approach to marketing and sales.
• Never make a mistake of letting the accounting department control the planning process. If this happens (as is too often the case), the result is a series of financial projections supported by some narrative. The numbers are not based on any sort of competitive analysis, market research or strategic opportunities. The projections are based on historical results with a percentage add-on. Once again, this process ensures the failure of the strategic plan for the business. Research has shown clearly that the marketing, sales or research group should lead the process.