When you run a small business, the last thing you need to make any sort of mistake. Big mistakes can be costly and impact your earning for years to come, so it’s important to avoid them. The best way to side step mistakes is to be aware of the most common ones and remember everything in business is a learning curve.
Businesses make mistakes. That’s just a fact. Even those you might think are “successful” because they’ve been around for 10+ years, will have made a few (and might still be making them). The best thing you can do for your business is observe and learn.
Although some of these big mistakes may seem more common in the service industry, they really do fit the bill for almost any type of company.
Keep reading to find out the most common big mistakes, and how to avoid them!
Table of Contents
Underestimating The Time Needed for a Project
This is a big one and is relevant for service companies and those who sell products. If you don’t correctly estimate your time to perform each and every service in your repertoire, you will either end up overworked, or with an angry client base.
Give your customers a realistic timeframe and you’ll both be happy.
Setting Incorrect or Unrealistic Price Points
Different industries have their own variables as far as costs go. You need to be aware of the factors that can affect your business to guide your project or product pricing. Things like time taken, materials used, amount of people needed on the project should influence your choices.
How do much your labour and materials cost? Employees cost more than just salary and not every employee is part of your labour cost.
Other things to consider are that companies have insurance to pay for, a premises, equipment, vehicles, infrastructure and many other things. Overheads need to be considered when pricing is discussed.
The best way to get a good idea of pricing is to investigate your competitors and use them as a guide for your own pricing.
Reluctance to Integrate Technology
It’s not unusual for business owner to shy away from new technology. After all, technology moves fast an investing in it can be expensive. This means some business owners might be cautious if they don’t understand how the technology works, what it can do for them, or even how much money it can save or make for them in the long run.
For example – Industrial Vision Systems might seem like a company offering futuristic services, but it’s a actually a great way to implement quality control. It uses AI to automate effective and efficient quality control, which can save money on both staff and returns.
Not Charging for All of Your Time, Effort & Costs
This seems like a stupid statement but it’s not uncommon for businesses to pride themselves on going over and above. If you like to provide those added extras, someone has to pay for them.
For example, if you go to a high end hair salon, they’re likely to offer a stream of complementary luxury coffees and biscuits. An averagely prices salon will probably have a regular cup of tea or coffee up for grabs. The cost of fancy refreshments will have been factored into your bill, as well the the high rent for a good location and an experience that makes you feel like an A-lister.
Think about the baseline that your company would like to provide as standard, then price it realistically.
Not Getting Paid Fast Enough
Cash flow can become an issue if you’re too easy going with your billing process. Make it clear up front when you expect to be paid. Do you need to be paid up front? At the time of providing the service? Or do you honour a 30 day invoice settlement period?
The best thing you can do to keep your business liquid is to bill promptly and chase overdue payments fast.
Not Vetting Who You Hire
Employees need to share your value. If you hire someone who doesn’t fit in with your business culture you’re unlikely to get the best from them. Equally, if you hire someone who isn’t suitable for the job, you’ll also struggle to get them to work efficiently.
A bad hire can cost you big. From making expensive errors, losing customers or being dishonest and stealing from the company. Always ask for a reference and always vet potential employees thoroughly.