Big Red Cloud Online Accounting Tips
However unique or useful a businesses product or service is, if the fundamentals of the underlying business are not sound it will be difficult for that business to succeed. Nearly a third of new businesses fail within their first year and roughly half within the first three.
Sometimes the causes of a businesses failure are outside of anyone’s control but careful business practices can improve your odds of being in that group that goes on to succeed. Here are a few common business mistakes for SMEs to watch out for.
Too Much Focus on the Product Not Enough on the Business
Many business owners spend a lot of time trying to get the product or service they are selling “just right”. The problem arises when that focus comes at the expense of the broader business. No matter how great the product is if the underlying support structure is not properly established the whole thing can collapse.
No product or service will ever be perfect and often the best way to improve it is to get feedback from customers. You can only do this by letting it out into the real world. Much of your time might be better spent on developing a marketing approach to make sure as many people as possible know about your product. This way, you can get as much feedback and as much engagement as possible.
Not Focusing on Your Core Business
This may sound like a continuation or even the contradiction of the last point but it is different and critically so. As your business begins to take off it is easy to become distracted by new opportunities and areas of expansion.
This can lead into a scattergun approach where a business tries to be all things to all people. While growth and expansion can be good things a small business can spread itself too thinly very quickly.
You can soon find yourself in unfamiliar territory, undertaking a new venture with many unexpected and unforeseen requirements. It is important not to become overextended and to ensure the core of your business is working as it should.
Not Reading the Data
While your gut feeling might have gotten you through a few tight spots and maybe even landed a few big clients it is important you don’t ignore concrete facts because your stomach says otherwise. Good business instinct is often honed by experience and expertise but that doesn’t make it infallible.
Gathering data on what and how your business is doing is important. Analysing and acting on it is equally so. Talking to consultants and market experts provides an objective perspective.
Solid data makes decision making that much easier. It also makes those decisions that much more fruitful.
This particular business problem can be a symptom of the previous one. Hiring key staff is a bigger commitment than we often consider. Often people are hired because the position needs to be filled urgently and they are the first person with acceptable qualifications to be interviewed or worse, someone had a good feeling about them.
Recognise hiring an employee as the investment that it is. Just as with any other investment you might make, be sure to do your research beforehand. Closely check references and carry out multiple interviews over a period of time, preferably in different locations to get a better idea of the person.
For new businesses it can be hard to gauge what an appropriate price for their product or service is before they have established themselves. It can also be tempting to offer a low price to try to lure in customers quickly.
If a business has misjudged its price then they will soon find themselves offering customers a sub-par product, thus ruining their burgeoning brand name or else they will quickly start running at a loss.
Take the time to calculate a sustainable pricing formula that will account for unexpected events and keep your business profitable and productive.
Big Red Cloud’s online accounting software can play a substantial role in helping new businesses avoid these mistakes. Comprehensive accounting capabilities allow you to quickly and easily review the status of your business, ensure pricing is appropriate and make decisions with complete and accurate data.