I’m sure there are days when you feel you must have been insane to voluntarily give up the security of your steady job, with all its benefits, set daily hours and free weekends! Well, let’s not get into those strait jackets just yet…
Remember, you are not alone. Almost all the business owners I know have made most of these mistakes, including me. If you aren’t in business yet, try to avoid at least some of them.
Let’s look at the 7 mistakes that all small businesses make, and do something different!
1. “I’m not very good at marketing”
Small business owners often try a bit of marketing – perhaps a flyer or brochure at busy robots, or a small ad in the Yellow Pages or the local Caxton paper, or maybe banners on a website. However, precious resources are often wasted on marketing that doesn’t work.
A tip to save yourself money on wrong marketing: when printing your marketing material, be it flyers, ads or banners, add different extension numbers to your telephone number on each marketing item – e.g. put extension 1 on your flyer, 2 on the banner, 3 on the Yellow Pages insert and 4 on the Caxton ad. When the calls come in, the caller will ask for the extension shown on the relevant marketing item – let’s take extension 1 as an example. Your reply will be ‘I’m afraid that extension is busy, may I help you? ‟ Then tick off extension 1 on your “Where I spent my money on marketing” list. You’ll then see easily which marketing method works for you and therefore where to spend more/less money.
2. Going in without a business plan
Experts are divided on this issue.
Many of the best business plans are carried around in heads, but obviously you cannot go to a bank or funding source without a detailed strategy covering your marketing, sales and financial forward planning. And there are many excellent templates available either at the financial institutions or online to assist you with this. However, if you aren’t applying for finance, rather write one yourself in a format that suits you.
In fact, I think a Marketing Plan is far more important. There’s too much emphasis on the “Cash Flow” in many business plans, and while healthy finances are obviously crucial, you need to place a strong emphasis on how you are going to get lots of money in the bank.
When travelling around the country to see small businesses, I often sit down in front of a business owner and ask “What is the problem?” The answer is “I have a cash flow problem”. I take a look at the Financials and see that the REAL problem is that there is no cash to flow! These owners actually have Marketing & Sales problems. If Marketing and Sales plans are firmly in place, there’ll be some cash and then you can complain about your cash flow.
3. Doing things the wrong way round
Unless you are Jensen Button you do not need a fancy, fast car. You will no doubt need a car, office equipment (such as a computer and a good printer), and you may even need an office, but these don’t have to be fancy – don’t spend money unnecessarily. Make the money first, spend it later.
4. Thinking it’s all about you
Believing that because we think it’s a good idea, everyone else will think it’s a good idea is another mistake Small Businesses make. I recently travelled through Alexander Township with my good friend Boetie and noticed a remarkable business opportunity. There was not one single shop that sold swimming pool chemicals and swimming pool equipment – what a fantastic business opportunity! When I mentioned this to Boetie he almost wet himself laughing. “There are no swimming pools in Alex” he roared. Well, just goes to show, a little “local knowledge” goes a long way. It’s not about what you want or like, it’s about what your market wants and likes.
5. The worst number in the world
For small businesses, it’s number one: one person, one idea, one source of income, one client. If any of these fall by the wayside, you’re in real trouble. Every small business owner dreams about landing that big government contract – until you get that big government contract. After a hefty dose of dealing with one – possibly high-maintenance-client, you’ll be sitting dreaming about lots of little private contracts, because they pay. So try to avoid one idea, one person, one client!
When we finally get it right, we forget to thank the people around us.
We forget to thank our spouse and our children, who stood by us and went for weeks without life’s small luxuries; we forget to thank the people who gave us money; and we forget to thank our clients.
We think we have arrived and it was all due to us. We give ourselves a pat on the back and we move on.
Great entrepreneurs have one great skill that no-one else has: when things go really well, they have the ability to look out of the window and see who they can thank. When things go wrong they look in the mirror and know exactly who to blame. Other people do it the other way around – when things are going wrong; they look out the window for someone to blame and when things go well they look in the mirror.
So ask yourself – which type of person are you?
7. Following the herd
Most of us tend to do this. Just because somebody else is doing something, we think we must also do it. Want to be seen as apart from the herd? Don’t worry about finding an original idea – rather find something original about your idea. Work on that, expand on it, sell it and make people sit up and take notice.