It’s rare for a business to get off the ground without a couple of hiccups or blunders along the way. In fact, many make deadly mistakes that leave them with no other option than to shut their doors for good.
What better way to avoid such mistakes than to take a leaf out of the books of those that have walked the route and succeeded time and again?
Founder and chairman of global business coaching franchise ActionCOACH, Brad Sugars shares three top business mistakes SMEs make. You can find more information about these and others in Sugars’ latest book Buying Customers.
1. Not investing in marketing
Sugars says business owners don’t put enough energy and effort into marketing, resulting in insufficient growth.
“Marketing is viewed as an expense or a negative for the company, mostly because they don’t really understand marketing or the whole buying customer’s philosophy, how you take marketing and use it to make money rather than cost you in business.”
Sugars adds that if done well, the money invested in marketing will attract more customers and more money and so grow the business. “Marketing is not about spending money; it’s an investment if done correctly.”
He says many businesses invest a lot less time than they should in marketing. “If you ask business owners to show you their marketing plan, even though marketing is the biggest growth factor in business, they don’t have a marketing plan.”
2. Pricing too cheap
SMEs try to price too cheaply even though the reality is that a business has to run on profitability, not just sales.
“If you’re not making a decent profit then you can’t invest money into growing the business. It’s a very important aspect of your business to get your pricing right so there’s enough profitability in the business.
“Unfortunately most small businesses seem to think that as long as they are cheaper they’ll get the sale, whereas the main aim is not to go out there to get customers because you’re the cheapest, [because] then there’s no loyalty in those customers.”
3. Not doing business owner’s work
Business owners often find themselves consumed with doing the work that their employees should be doing and then wonder why they earn the same salary as the people they employ, says Sugars.
“If you are not doing owner’s work, then why should you be paid owner’s rates? Doing employee’s work for me is a very poor understanding of what is owner’s work rather than just employees work.”
SMEs in developed versus developing countries make similar mistakes. Most SMEs come from someone with a technical background, either they are a good hairdresser or an engineer. “They are often good in the technical job of the business, but unfortunately that doesn’t qualify you to be good at running the business of the business.”
Sugars says the business owner should determine what training is going to be necessary for both the manager and employee of the business to ensure the business performs better.
“Training will ensure that you’re doing better at the tasks you have with the existing employees you have. Quality comes through the quality of the employees, including the owner/or manager,” says Sugars.
We are giving away five copies of Brad Sugars’ book Buying Customers. Share your business challenges with us and how they have affected the growth of your business.
Send your responses with subject ‘ActionCOACH Giveaway’ to firstname.lastname@example.org