Business owners tend to drown themselves reading success stories of other businesses so much these days that they forget to focus on business that failed and the causes of their failures. But then, what they don’t realize is that they need to study failures as well to know beforehand what could go wrong with their business as well.
Here I walk you through 5 common mistakes that small business entrepreneurs tend to make, which could result in a breakdown of their business.
#1. Under Selling your Products or Services
Lots of small business owners sell themselves short. They don’t demand the best prices for their products or services because they fear that their products won’t sell. But underpricing doesn’t guarantee that your business will survive in the long run given that you don’t make much from your products and services. And you never know whether your products will sell at all because consumers tend to compare lowly priced goods with low quality.
So, instead of underselling your products or services, survey your ideal customers to find how much do they pay for similar products. And whether they’d be interested in buying your product if you charge a little higher?
According to Harvard Business Review, overpricing could stimulate curiosity. In an experiment, they found that students were willing to pay 20% premium for expensive products and when the products were priced at 80% premium they were able to recall a considerable amount of product info, too.
#2. Not Running a Blog
Everyone is into blogging these days, let alone businesses. So if your business isn’t taking advantage of this low-cost strategy, be assured you are losing out on a lot of business these days. On the contrary, if your business is into regular blogging customers can easily find your business online.
So, without further delay, start blogging for your business continuously. However, make sure you write on relevant topics, and more importantly, address the needs of your customers. If you are running a digital marketing agency, make sure you include relevant keywords in your website content, which will help your site rank higher in search results. Think what your customers would be searching for and accordingly embed those keywords in your post. Providing highly actionable, reader-friendly content combined with relevant keywords is what could get your site to the top of search results. How to go about with your business blogging? Check out with top content marketing agencies to get a better idea on the same.
#3. Underestimating the Importance of Working Capital
Several small businesses are not serious about their financial planning. On top of it, they carelessly throw away their money into initiatives to see whether they are useful options or not.
However, without working capital, business owners would find it difficult to tackle everyday issues such as paying bills, salaries, vendor payment and so on.
So, find out if your business needs additional working capital, in addition to the cash you have. If working capital is emerging to be a big problem, then you should start looking out for investors or apply for a business loan. Or, you can even trim down your existing resources to save on some cash.
#4. Not Hiring through References
Your job as a business owner is to hire smarter people, especially the ones who are smarter than you are. However, while looking for new hires, see that your job description is in alignment with your company’s needs and not with the competitor’s job description.
And, remember, the best way to hire people is through references. However, small businesses don’t give enough weight to references. This should be corrected, because references bring in the best people on board.
# 5. Uncalculated Spending on Marketing
Most of the entrepreneurs are known to commit this mistake, seasoned or otherwise. They tend to set up Facebook Ads, based on some keyword research, and then they think that’s all that needs to be done to attract prospective clients. But then, did these ads bring in the desired number of customers?
If the answer is not in the affirmative, narrow down your ad spend to two or three channels. Spend a small budget on these tests and then track conversions to make sure they are profitable. Scale the paid ads spending only if things are working for you.
#6. Having your Fingers in Many pies
Having your fingers in many pies, in one sense, is good. It gives you insights about the functioning of different departments. On the other hand, it might stress you out and might as well restrict your creativity. That’s the reason why small business owners need to focus on delegation, more and more. Delegation makes sure that you have enough time on hands to build your business, and chiefly concentrate on providing unique value to your team, to ensure the future success of your business.
To err is human. But then, repeating the same mistake twice is foolishness. So, the key is to find things that are not working for you and taking steps to avoid them. Sure, the problems will vary from industry to industry. However, you’ll find that entrepreneurs have solved most of the issues in the past.
So, if you could find and fix your problems faster, running a small business is far easier than think.
Author Bio: This is Jennifer Warren, a Content Crafter for GoodFirms – a review and research platform for mobile app development, web development companies and more. The company publishes research report on a time to time basis, the latest one is on Email Marketing.
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