Entrepreneurs – Critical Mistakes That Will Damage Your Business

You’ve decided to start a new business, or you already have a business and you are making it through the recession.  So what are the mistakes that are likely to severely damage your business?

Cash flow:  With the lack of loans and bank overdrafts it is important to chase your debtors and pay only when you have to.  Renegotiate your payment terms, your lease payments and your overdraft facilities and only spend on what will bring in revenue.

Not Marketing Enough: Now is not the time to give up on your marketing, but now is the time to make every piece of marketing work for you.  Split test and check the responsiveness of each piece and each advert.  Look after your list and market to them.

Not Saying No Enough: As money becomes tight, you need to learn to say no to advertising that does not work.  No to staff who are spending too much.  No to any expenses that are not necessary.  You get the idea.

Chasing Non Profitable Work: When the going gets tough, it is tempting to chase any work that comes along.  You still have to be choosy. Undertaking work that is not profitable is business suicide.  Similarly working at projects that are of a low grade or worse, slightly illegal, will send messages to your customers that you are not a quality company.  Woolworths in the UK did just this – it used to be renowned for low cost, quality items and was the place to find everything you needed.  Gradually over the years it’s ranges lessened and it’s quality went down.  This great bastion of British culture, with branches in most major towns, went bankrupt this year!

Keeping Too Many Products: Go through your products and work out which ones sell and which don’t.  Clear out in a sale, those heavy stocks and stop producing those that don’t sell so well.  Stocks are dead money and cost to store, so clear out as much as possible.

Good luck.