As a business owner, you’re bound to make mistakes, and some can be a great source of learning.
However, there are also common mistakes that are easily avoidable.
After more than 30 years working with small and medium business operators, here is my list of the 10 biggest mistakes business owners make, and how you can avoid them.
Not understanding your customer
As Peter Drucker famously said: “The purpose of a business is to create and keep a customer”.
That means you need to know your ideal customer from the outset and forge a meaningful relationship with them where you respond to their changing needs.
One of the biggest mistakes a business owner can make is to fail to know their customer and fail to keep listening to the feedback.
When you fail to understand your customer, you fail to meet their needs. And in the long run that can really hurt a business.
Failing to market wisely
Marketing is key to the growth of your business, but it’s all about marketing wisely.
That means you need to understand where your ideal customer is likely to “hang out” and meet them in the place (or channel) of their choosing.
This isn’t about mindlessly throwing money at marketing either. It’s about being strategic about where you share you message and what you say with a clear marketing plan.
Not knowing your numbers
Numbers tell you a detailed story about your business, but too often I see business owners make the mistake of:
- Not knowing their numbers
- Not understanding what they mean
- Not using these numbers to pinpoint areas of business improvement
Not reinvesting in your business
In order to grow, you need to reinvest in your business, whether that’s via marketing, hiring additional staff, deploying new technology, or investigating new products.
When you invest in your business wisely, you provide the solid foundations for growth, while also protecting your business against competition.
Trying to do it all
I’d argue this is possibly the biggest mistake many business owners make, particularly in the early years of their venture.
You cannot do it all, and if your business is growing there will come a point where you need to hire additional staff or outsource.
If you have staff in place, it is also imperative to implement systems and procedures, loosen the reins and stop micro-managing
Hiring the wrong people
Staff are the face of your business and the conduit to your customer. That means you should pay careful attention to the calibre of the staff you hire.
It’s also important to ensure you have the right people in the right seats of your business, with a personality and skills that fit their position and the culture of your organization.
Not diversifying your revenue sources
When you are dependent on one product line, or the majority of your revenue comes from one customer, your business and livelihood is at risk.
In other words, don’t make the common business mistake of having all your eggs in one basket. As your business grows, make sure you diversify your client list, and the lines of products you offer.
Failing to understand your SWOT
It doesn’t matter how long you have been in business or how successful your business model is, you should remain aware of your business’ strengths, weaknesses, opportunities and threats (SWOT).
A constant cognizance of your SWOT helps protect your business against competition, but also allows you to identify areas for growth.
Not making SMART goals
Goals propel your business forward and allow it to grow. That said, these goals need to be specific, measurable, actionable, realistic and timely (aka SMART).
SMART goals allow you to set actionable outcomes and then chart your success.
Failing to have a business plan
If you are looking to grow a business or simply maintain profitability, you need to have a business plan. Too often business owners make the mistake of setting a plan when they start their business, then forgetting it.
Throughout the life of any enterprise, you should be actively planning the path forward to ensure your business has the staff, technology, and resources you need to guarantee its success moving forward.