A new year presents business owners with not only an opportunity to evaluate and set goals for the upcoming year, but also a chance to avoid some of the common business mistakes that are made during the year.
This is according to Christo Botes, Executive Director of Business Partners Limited, who says that as entrepreneurs are often required to be a jack-of-all-trades, focusing on too many aspects of the business which can result in costly mistakes occurring as it is impossible for one individual to oversee all the various roles within the business.
“Being successful in business is a delicate juggling act and while business owners cannot completely avoid making mistakes, they can ensure that mistakes already made are not repeated. When it comes to managing a business, recurring mistakes can threaten the long-term viability and success of the company. Many business owners also seem to repeat simple mistakes that could have been avoided by exercising diligence and proactive planning.”
Botes offers business owners the following practical tips to assist them in identifying and avoiding common errors in 2015:
Evaluating and adapting with the Four Ps of Marketing: The Four Ps of Marketing is a common industry term in the marketing sector, but is often overlooked by business owners. Product, price, promotion and place, otherwise known as the ‘Four P Formula’ should continually be evaluated and adjusted as products, markets and customers’ needs change and evolve. For example, should a business owner not plan accordingly, he or she may face the possibility of client demand for a product outpacing production capacity, or worse, product demand dropping due to consumer shifts in the marketplace.
Regularly evaluating and adapting this marketing mix will ensure that a business achieves maximum results, as well as stays ahead of competitors.
Stay in touch with your market: Good customer service is often a selling factor in a small business’ success, but oddly it is also one of the first aspects that tends to fall by the wayside when the business expands.
Although it is crucial that business owners continually seek new clientele, it is also important to maintain and nurture existing customer relationships as these connections will yield the majority of a business’ revenue. Maintaining relationships with existing customers will also result in referrals of your service, product or business to friends, family and colleagues – a grapevine effect that is invaluable.
Unbalanced accounting procedures: Inefficient ordering systems, inadequate creditor and debtor management, as well as a lack of control over gross profits or overheads often lead to cash flow problems within a business. In order to avoid such problems, business owners should ensure that there is a consistent flow of money coming in through debtors being collected within the terms as agreed with your customers and costs of raw materials and company expenses should remain under tight control of the owner or a person that understands the control of costs.
Matching new hires to the business: There is no one-size-fits-all approach to recruiting new personnel. The process must be tailored to the type of business, and the personnel hired should match the corporate culture of the business. Appointing the correct type of employees will contribute towards the long-term success of a business, and therefore the task needs to be done with great consideration.
Inadequate business systems and operational processes: It is important for business owners to evaluate internal business systems and operational processes. A new year brings opportunities to develop and grow a business, and without sustainable internal systems, business owners may not be able to grow their business to its next level.
“Effective internal operations and product or service innovation go hand in hand with business success. Business owners who possess the ability to learn from past mistakes will further fuel their business’ success.” concludes Botes.