Small businesses have been a part of the fabric of society for hundreds of years now. Whether it’s the proverbial shop around the corner, or an online storefront peddling its wares, small businesses are here to stay. However, according to the Bureau of Labor Statistics, 50% of all small businesses fail within the first four years of being launched! This is because it can often be difficult to zone in on problem areas early on, which leads to inefficiency and dwindling consumer interest. So how does one learn what to prioritize, and what can be let go?
In this post, we’ll look at 5 of the biggest mistakes small business owners make when first starting out, and how to avoid them using different tools and techniques. These range from technological solutions such as asset tracking software, to hands-on management strategies to keep employees motivated. All of this can help bolster productivity, drive conversions, and improve ROIs, all with minimal effort to you. Therefore, without further ado, let’s dive straight into 5 costly mistakes your SMB might be making.
Not investing in technology
One of the worst things a new business can do is to try to save money by not investing in the right kind of technology. Of course, different businesses have different needs; a solution that works for one business might not work for another. This is why, as a small business owner, you need to step back and evaluate what your business needs are, and which areas could do with a bit of automation and streamlining.
Tools like asset tracking software can help you keep track of business assets for increased efficiency
This is all the more important because the small business climate is subtly shifting. 51% of all small business owners are over 50 years old. These are often the same businesses that are reluctant to invest in new technologies, and prefer to do things the ‘old way’. However, this way can often lead to blockages in productivity, or force employees to do grunt work that could easily be replaced by a smart algorithm or two. For example, if your business is trying to track business assets across locations, or engage in efficient inventory management, your best bet would be to abandon your musty spreadsheets and invest in a solid asset tracking software. Similarly, if you’re a customer-facing business, perhaps a CRM solution would be much better received by your employees than manually keeping track of all your customer engagements.
Cluttering up workflows
When you’re first starting out with a new business, you may have a hundred ideas whizzing through your head. You want to be an innovator, a pioneer! You want to do things differently, you want to diversify, and you want to scale as quickly as possible. While this kind of ambition is inspiring, it may also lead to one of the major pitfalls small business often fall into, namely aiming for unsustainable growth. This is why, as a small business owner, you need to think about the functions you deem absolutely necessary for your business, and go from there. Streamlining workflows is absolutely essential when you’re first starting out. A lean management style not only gives you a greater margin for error, but it also helps you zone in on vital tasks and product selling points. This is not an isolated idea, but can be incorporated into other facets of business as well, whether it’s downsizing your production scale or simplifying your restaurant menu!
Employees are the backbone of any business, but this is especially true for small businesses. This is because often, a small business workforce is being asked to wear a lot of different hats at one time. They could be talking to customers, managing inventory, tracking finances, and updating the website all in a week’s work. This is why it is vital that you invest in your workforce and make them feel like they’re an important part of the operational process. Not only is a happier workforce also more productive, but it can change your product or service for the better. Think of it this way; an engaged workforce basically means you have a whole team of people who want to ensure your company does the best job it possibly can! Innovation and creativity in this sense is a great asset to have, especially when you’re first starting out. Therefore, recruit the smartest people for the job, and encourage them to put their best feet forward.
Discounting your numbers
Some small business owners seem to make business decision on the fly. They think their smaller scale grants them the flexibility to play around a bit, and improvise when it comes to decisions that more established businesses would normally sweat over. However, this is absolutely the worst thing they could do! In fact, because of their smaller scale, small businesses need to be even more cautious when making certain decisions.
The best way to lower the risks involved in making big decisions is to ensure you’re basing your decisions on cold hard facts. This doesn’t seem to be a strength small business owners seem to focus on, though, as a study recently found out that 18% of all SMBs don’t measure any KPIs at all! This not only makes it harder to make smart decisions, but also makes you vulnerable to sudden shifts in the market that could otherwise have been predicted using weekly data insights. Therefore, all small business owners should measure KPIs fastidiously to lower unpredictability, especially in volatile markets.
Not following up with customers
We’ve talked about how important it is for a small business to engage its employees, but what about the customers? Contrary to popular belief, business owners don’t need to have increasingly creative ways to engage with their customers. Simple face-to-face interactions are just as reliable now as they were before! However, with increased globalization and the proliferation of online businesses, people have a lot more avenues to exploit if they want to stay in touch with customers. This includes forums, blogs, emails, and even their own company website. This seems like common sense, but you might be shocked to find out that only half of all small businesses operating today have websites! Consumers have so many options these days. They could get something from a brick and mortar store around the corner, or from an online storefront halfway around the world. This is why it is particularly important to keep your customers engaged, and speak to the kinds of pain points they’re wishing to resolve. In many ways, this kind of familiarity and personalization is the biggest strength of small businesses, but one that is often neglected these days in favor of other ‘trendier’ alternatives.
Small businesses are evolving over time, with the space full of fierce competitors and cunning trailblazers. However, SMB owners need to play to their own strengths. This could be done incrementally, by investing in smart tech like asset tracking software, for example, or recording data that can help them make smarter business decisions. Most of all, however, they need to stick to their vision, and never lose their drive towards continued success. That is unquestionably the most important part of starting and sustaining your very own venture. As pioneering entrepreneur Seth Godin says, “You are not your resume, you are your work”.