Top 7 Mistakes Made by First-Time Business Owners

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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.

5 Signs of a Booming Economy

Today’s economic climate is anything but stable. Some reports say the economy is buoyant while others predict doom and gloom, so how do you navigate the ‘double speak’ and ascertain what is really going on with the economy? Here are 5 signs that indicate a booming economy. 

Employment Levels

The employment rate is an excellent and accurate indicator to help track the state of the economy. Australia fared very well in the global financial crisis as it was able to maintain high levels of employment, mainly due to the mining industry which sustained growth throughout the crisis.

A healthy mining sector results in jobs not only in the mines themselves but also create employment in many other industries. Hyundai Construction Equipment is just one example of this spill-over effect which sees entire industries sustained by the mining boom. Safety equipment, maintenance needs and catering requirements are a couple of other examples.

To gage employment levels correctly it is important to ascertain the percentage of the population in actual employment, as the unemployment rate doesn’t tell the whole story. Students are an example of how unemployment figures can skew the results. To ascertain the health of the economy it is necessary to understand how many people are actually on the payroll.

Personal Income and Outlays

Another sign of a booming economy is high personal income and expenditure rates across the population. Reductions in employment and income soon result in reduced spending and the economy suffers. The roll-on effects are swift.

Spending across all areas of goods and services is often one of the first clues to future economic trends.

Retail Sales

Economists follow retail sales closely to help understand the spending behaviour of consumers. While most retail stores sell to individuals just as many sell to small business and contractors. Thus high performance in the retail sector affords a pretty conclusive glimpse at the robustness of the economy at any given time. Conversely, a drop in retail sales indicates a fall in the economy. 

Consumer Price Index

The Consumer Price Index, or CPI, is also the focus of economists. The overall Consumer Price Index is an attempt to measure consumer pricing, to see how the price of goods changes. In a nutshell, the CPI measures inflation. 

New Home Sales

Another strong indicator of a booming economy is strong growth in new home sales. New homes have a greater impact on GDP (gross domestic product) than existing home sales. A new home generates much more spending than selling an existing one. Building a new home will require builders, cabinet makers, roofers, plumbers, carpet layers, tilers and more. Added to this is the materials required to build a new home including timber, brick, cement and gravel to name a few. For this reason the rate of new home sales is highly relevant to determining the resilience of the economy. There is usually a lot of spending associated with moving into a new home too, buying electronic equipment, white goods and furniture.

Watch these signs and you will get an idea of how the economy is performing and make your investment decisions accordingly

5 Common Mistakes Made When Purchasing a Car on Finance

Most people will need to acquire finance to purchase a car. The main thing to remember is not to borrow more than you can easily repay. People can be seduced by the sight of a gleaming new car and the talents of a creative sales person and end up signing up for a car and a loan that is beyond their means to repay. Do not be talked into buying something you can’t afford and end up being the victim of bad credit car loans as it will take some time to repair a bad credit rating.

Here are 5 mistakes to avoid when you are buying a car on finance.

Not Doing the Research

The biggest mistake you can make is to go car hunting without doing the research. There is a wealth of free information available on the internet that can guide you to make a smart car purchase. Research as much as you can. Find out what others are saying about different makes and models. Consumer advocacy bodies will usually post warnings about negative experiences. Check out blogs, forums and also websites published by roadside assistance groups. Avoid buying a lemon by doing your research online.

Letting Emotions Rules

Buying a car is exciting and it is easy to get caught up in your emotions at the sight of a shiny new car. A good car dealer will realise this and they will leverage your desires to try and convince you to buy. This is where your research comes into play. Remember what you have discovered on the internet. Be swayed by facts not by your imagination. While it’s normal to get excited about buying a car, make sure you keep that excitement well hidden from the salesperson. Be prepared to walk away from a car and you will be in a stronger position to negotiate price and to analyse if a certain car is really what you need.

Buying a New Car

A new car will depreciate in value the moment it leaves the showroom. If you buy a new car on finance you are not only making the monthly repayments, you are also losing a certain amount each month in depreciation, which can add up to a lot of money. While buying a new car may be appealing, you will save on depreciation by buying a second hand car. 

Thinking in Monthly Repayments

Car dealers will often try to talk you into a car by framing it in terms of the amount you will need to repay each month: “for only $300 a month you can have this”. Keep your focus on the purchase price and how much you are willing to pay in total. 

Buying Extras

A car dealer worth their salt will try and talk you into buying add-ons, many of which you don’t really need. They will wax lyrical about the benefits of window tinting, leather seats and an alarm system. Don’t be tricked into this.

Investing in Property for Your Retirement

With the cost of living increasing, and investments having suffered extensively in the economic downturn, retirement can seem a daunting prospect. Wanting to get out of full time employment can mean having to turn to part time jobs in low paying positions, just to maintain a standard of living. Fortunately, by using your assets wisely, and investing in the property sector, you can retire and still make an income while keeping your own hours.

Release the Equity in Your Home – When children have flown the nest, the need for large houses with lots of rooms diminishes considerably. Downsizing is often confused with ‘settling for less’ in order to make ends meet, but in reality downsizing gains you far more than you lose. Take the time to find a property you really love in an area that makes you comfortable and happy. A smaller space with fewer rooms means less cleaning, less upkeep, and lower bills. Downsizing can really save money but more importantly, downsizing to a smaller property means you can free up the equity in your home. Start the process well before your intended retirement date and you are in the perfect position to wait out the market for a buyer who can offer you the best possible price.

Invest in a Second Property – Investing in property in a market where rentals are at a premium due to the need for large deposits that many first time buyers and young professionals do not have means you are able to capitalise on your money. Without diminishing your investment or being subject to financial attrition in the same way an annuity might, you can secure a monthly income that fluctuates over the years in line with the cost of living and inflation. Unlike pensions that pay out at a set yearly rate, losing value as years pass, a property investment stays in line with the market. The rent from a small flat is a monthly stipend that can easily match a part time wage, with a fraction of the work.

Let the Professionals Work for You – If you don’t fancy the upkeep and landlord duties involved in property management, there are plenty of places to turn for advice or simply to hand over the responsibilities in return for a small percentage of the monthly rental. Companies like Rylands Associates are experts in property management and can take care of everything for you if you decide to take a late life tour of the world, or simply choose to relax and enjoy the comforts of home.