Friday, January 31, 2014

Top 7 Mistakes Made by First-Time Business Owners

Image via Flickr by IntelFreePress
First time business owners are usually experts in the products or services they offer. But that alone is not enough to make a person successful at business. They focus on improving technical aspects of their business while neglecting strategic and management aspects of the company: the necessary components that grow a business. Consider the following mistakes first-time business owners often make.


Lack of a Well-Defined Vision


First-time business owners need to create a view of the future — a vision. It has to be far-reaching and state a positive direction that the company will take. What’s more important, it has to inspire employees so that they buy into the vision and work toward the same future for the company the owner has envisioned. This will make for happier, more efficient employees who are able to properly operate your business, whether you’re present or not.



Improper Systems and Processes


It’s very challenging to start a business off with the most efficient systems and processes, but failure to review and establish the most efficient processes possible quite often will lead to the business’ downfall. Proper systems and processes mean that employees are working effectively and efficiently. Document every step in your business model, form goals, outline steps and then compile it all into an operating manual.



Micromanaging



First-time business owners are extremely invested which quite often leads them to trying to run every aspect. The truth is that this kind of micromanaging stifles employee productivity, as well as loyalty to the business. Trust in your employees is essential to your success. Train your employees to do their jobs then allow them to do it. You need to elevate yourself above task manager and focus your efforts instead on growing your business.



Ill-Defined Job Roles


Creating accurate and well-defined job roles increases your rate of hiring the right people to make you successful. It’s easy for first-time owners to offer new jobs that aren’t well defined. The result is less productive workers and owners who continue to try to do it all. When employees fully understand the expectations of their positions the more likely they are to optimize performance. That is why it’s important to research and look at statistics job analysis list to help have a better understanding of where the job market is booming and for who.



Lack of Outstanding Customer Service


There are many factors that lead to a successful business, but one of the easiest and most effective is customer service that exceeds industry standards. This is where your business meets the customer; this is where the public gets to know you. Providing superior customer service is like planting seed money that over time will lead to bumper-crop type profits for a company. Conversely average customer service could slow down business growth and even kill it.



Failure to Expand Beyond a Small Group of Customers


One you develop a certain clientele, it’s easy for new businesses to focus their growth on this same population. This is very tempting, and generally an easy path to follow; however, relying on a small group of customers does not truly grow your company and should be avoided if you want to survive. Of course remain loyal to your core customers, but look beyond them as well so that your business continues to grow.



Over Concentration on Sales


When starting out, it’s easy to see only one line on a profit-and-loss statement — sales! On the surface, this seems to be true: the more sales you make, the bigger and better your business seems to be doing. This is not completely true, however. Having a lot of business is terrific, of course, but focusing only on sales will eventually lead to ruin. A “more sales only” mentality causes companies to grow too quickly, and many businesses have failed during such a peak growth phase. Focusing on only one aspect will result in early failure.

There are many other ways in which first-time business owners can make mistakes. But not learning from those mistakes and failing to pick yourself back up can also be a fatal mistake. Move forward with confidence and learn all you can and you’ll eventually find success.

No comments:

Post a Comment

Join 1000's of People Following 50 Plus Finance
Real Time Web Analytics