Let’s face it; running a successful business is no easy task. From a sluggish economy and a beyond over-crowded marketplace to more and more regulations and restrictions being thrust upon the unsuspecting business owner, the barriers to business success can be overwhelming. And while there is no shortage of hindering factors that are beyond your control, there are some pitfalls to a successful business that you yourself might be responsible for. So, here are some common self-imposed pitfalls that you should seek to avoid in your own business.
Pitfall Number 1- Taking Your Loyal Customers for Granted: Businesses often make the mistake of focusing all of their marketing efforts and attention on chasing down new customers. They put out incredible “half price” or “buy one, get three free” deals with the fine print reading “first time customers only”. The problem with this tactic is that it completely ignores the already loyal customers that you have, in favor of hunting new ones that will likely take advantage of your one time offer and then, move on to the next one time offer from a different company. And this doesn’t exactly entice your existing customer base to want to keep patronizing your business. Not only that- it is much easier to market to and get an existing customer to purchase more from you than to try to get someone new to start purchasing from you. So, while it’s important to seek out new customers, make sure that you don’t take your existing customer base for granted in the process.
Pitfall Number 2- Ignoring the Numbers: Another key mistake that is all too common amongst business owners is a lack of focus on the financial aspects of their business. Sometimes, business owners don’t know how to prepare their own financial statements or even understand what the numbers mean, so they let this critical aspect of business fall by the wayside. But, ignoring the numbers can be a major pitfall for your business. How can you truly know which aspects of your business are (or aren’t) working, manage your cash flow appropriately, determine which marketing strategies are working or know where your expenses need to be trimmed if you don’t know what you are looking for? If you don’t understand the financial aspects of your business, take a class or hire an expert to do them on your behalf and show you what you need to know about. Ultimately, it’s your business, so you need to be responsible for understanding all aspects of that business, including the numbers.
Pitfall Number 3- Recreating the Wheel: Consistency is such an important aspect of a successful business. For example, when you go to a Chipotle virtually anywhere in the country, there may be small variations, but in general, you consistently get the same thing in terms of customer service, food items and even store set-ups because they have systems in place for every aspect of their offerings. These systems allow for a more streamlined and effective business process. But, many smaller businesses operate by recreating the wheel over and over again, without a standard set of systems and procedures in place. This can be a dangerous pitfall for your own business. Make sure that you have a clearly defined system for every aspect of your business in place, from how you work through a specific project and how you greet your customers to how you follow-up with clients. You can write this out with a bullet-point checklist or even utilize technology if appropriate, but this will make sure that your employees know exactly what to do and that your customers are all having the same experience. It will also make it easier for new employees to know what is expected of them. These systems will free you up to work on those critical revenue-generating tasks that should be your main focus when running a business.
Pitfall Number 4- Not Charging Enough: In an effort to attract new customers or make more sales (especially with the sluggish economy that we have been experiencing for the past several years), businesses often make the mistake of trying to compete on price and thus, charge too little for their offerings. But, focusing on price rather than focusing on value is another huge pitfall for businesses. They make the mistake of not charging enough to cover all of the business costs that are associated with the business, like overhead, salaries shipping costs, etc. And competing on price will attract bargain hunters that will shop from your competitors as soon as a cheaper price comes along. This will not allow for long-term business success. Instead, focus on providing a high level of value and attention to your customers to create customer loyalty. That loyalty is the key to having a successful business.
Avoid these 4 pitfalls and watch how much more successful your business will become!Tags: Business Planning, business tips, Finance, Marketing, Money Management, Team Management