HOW TO AVOID THE 3 MISTAKES BUSINESS OWNERS MAKE
Presently, Covid-19 affected businesses differently. Typically, we saw that businesses had to pivot what they were doing to ensure that they remained open and step up to meet the new demands of their customers.
Over the last 8 years as business coach I have seen several mistakes that business owners make and in the wake of the pandemic I would like to bring your attention to the 3 most prominent mistakes and what you can do to prevent them.
Not having a business plan
The circumstances in 2020 were not easy and many businesses struggled to survive. There were also those who grew exponentially as they took advantage of changing customer habits and needs.
It is my belief, however, that businesses need to have a road map to know where they are going and failure to plan results in planning to fail.
Just this week I ran a webinar on business planning for a group of 200 tradesmen, which proved to be a light bulb moment for most…
Given that it was close to year end, I asked the business owners, “who has a written business plan?” The answer from the polls revealed that only 35% had a written business plan, whilst 65% had nothing in place.
I then posed the question “do you update your business plan quarterly?” to the business owners who had a written business plan.
Only 33% of the owners who had a business plan said that they updated their plans quarterly, the majority or 67% did not – and probably never looked at the plan again.
This analysis of the results shows that only a staggering 12% or 24 out of the sample of 200 business owners actively worked with a business plan to help them grow a sustainable profitable business that can work without them.
Lastly, I asked, “do you as business owners have a financial plan for your business?”
47% said that they did not have a financial plan (budget) for their business.
What should you do as business owner?
I believe that every business needs a clear written plan, because writing it down brings clarity.
It does not matter what your circumstances were in 2020, if you want to stay in business develop your 2021 plan, do a SWOTT analyses and develop a clear monthly budget.
All businesses must develop their 2021 budget
You must have clear SMART sales goals and a realistic expense budget. Create a 12-month budget to measure and track actual expenses in your weekly and monthly finance meetings.
Operating without a budget puts you at a distinct disadvantage to competitors who know their costs, monitor their results, and make business changes quickly if things do not go to plan.
Not ensuring you have the right team
One of the biggest mistakes business owners make is that they micromanage the business for far too long.
Being the manager does not mean that you must micromanage your staff. You have appointed them to help you build your dreams, not theirs.
Poor hiring decisions (and specifically when family members are involved) is a common challenge when there is no recruitment process.
Employing family members is great when the wind is in your sails but beware of the tension in the family when family members are asked to leave.
It’s a well-known fact that the team is the most important piece of the puzzle for any start-up and one wrong hire can lead to its downfall. Hire for attitude, beliefs, values and tenacity first.
Business owners can easily fall into the trap of hiring team members who are just good-enough. This is normally the case when budgets are tight and when the business is trying to ramp quickly.
Having the wrong team members can be deadly.
Remember to hire slow and if you make a mistake, fire fast. Business owners should develop a recruitment process for their business and look at ways to save time.
Explore disqualification steps in the process, be clear on the criteria and use group interviews to save time.
Remember WHO you employ is one of the most important decisions you can make for the growth of your business.
Not having a clear and actionable marketing plan
The best marketing is consistent marketing.
Marketing is an essential part of promoting your business, creating visibility, and growing your sales.
Business owners often get sold on new marketing tactics without measuring the results or understanding how it aligns to their business goals.
For the business owner to know what the best investment in marketing tactics all strategies are must be tested and measured.
Some of the common marketing mistakes made by business owners include:
- Treating marketing as an expense and not an investment. The sole purpose of marketing is to get new target market leads and to convert them to customers and then make them raving fans.
- In turbulent times the first reaction from business owners is typically to reduce the marketing spend. This is the absolute wrong decision. Marketing is the very catalyst you need to spur growth and drive new opportunities.
- Not developing a written marketing plan and budget is common amongst SME’s. We know that without a rock-solid marketing plan, businesses have a high rate of failure. It is a known fact that marketers increased their effectiveness exponentially when they developed a documented content driven marketing strategy.
My advice to business owners is to take the time to develop a written strategic marketing plan.
Calculate the financial costs of implementing your strategies and budget for around 8% of turnover.
Your plan should consider resources for activities like website design, inbound marketing, marketing collateral, social media etc.
Look at using the services of an expert to assist where you don’t have the expertise or time to execute on consistently.
Another problem could be that you are targeting the wrong audience and as a result you are flushing marketing dollars down the drain.
How can you decrease the cost of getting leads whilst at the same time driving up customer lifetime value?
If you target your ideal client, you will maximize the most of your marketing budget and find yourself attracting and keeping more customers.
So, what is going to do differently in 2021?
Yes, that is my question – what will you and your team be doing differently in 2021?
You still have time to think this through but why don’t you put in the work and start 2021 with clarity of focus and a detailed actionable business and marketing plan with a team that is aligned in supporting your business goals.
Wouldn’t that be great?
Connect with me today to schedule your one hour complimentary business strategy consultation session – you won’t regret it!
Yours in Business,
Coach Bert
