3 Mistakes That Can Sink Your Business (And What You Can Do to Avoid Them)

Disorganization and a lack of math skills and marketing acumen are what small business owners are concerned about, according to a recent survey. Despite these concerns, though, most small business owners are optimistic.

Conducted in late December of 2017 by market research firm Critical Mix, the survey polled just over 500 small business owners about their businesses. While it's encouraging that 86 percent of respondents said they were optimistic about the future, there were some troubling revelations.

Lack of Organization

Four out of five business owners in the survey said their businesses were either thriving or surviving and 53 percent of those owners said they had organized workplaces. On the other hand, of the business owners who said their firms were struggling or failing, only 23 percent said their workplaces were organized.

A third of the business owners surveyed said they believe disorganization in the workplace leads to a loss of productivity and three-quarters of business owners with struggling or failing businesses said they believe disorganization has negatively affected productivity at their companies.

What you can do: Regularly evaluate your business processes to ensure your business is running efficiently. This should be done at least annually and should involve all the people in a given process. Often, when small businesses start out, their processes just sort of evolve rather than get meticulously planned. The problem with this is that the way a process evolves might not be the best way of doing things.

The best and worst times of my businesses have always been dictated by how well the top two or three people in the organization work together. At one time we had a business structure where each of the top business units were independent and not aligned well. We thought the individual strength of the business units would lead to success, but we were wrong. Only when we stepped back and reassessed our business processes and sought input from the unit leaders did we realize we needed to find a way for the different units to mesh better.

Math Mayhem

Over half of the respondents to the survey said tax preparation is complicated and almost half said they handle their own taxes. However, 40 percent of respondents admit they aren't good with numbers and have no accounting experience. Insert red flag here.

What you can do: Budget for an accountant at tax time and put a bookkeeper at the top of your hiring list. Business numbers get complicated in a hurry and if you're not a numbers person, you might end up leaving money on the table or worse, accidentally breaking the law.

It doesn't have to be a person you hire. Sometimes it's just a matter of upgrading your accounting software. After the first big wave of growth in my main business years ago, we found ourselves in a cash crunch. We were growing, but still losing money and we did not understand why.

One of the best decisions I ever made was to upgrade from a simple accounting program to an enterprise resource planning system that included accounting. It was a big expense at the time for our small company, but it paid off because it gave us a more complete picture to work with.

Marketing Wisdom

One of the biggest challenges faced by business owners who took the survey was being effective with their marketing. More than a third of business owners who said their businesses were thriving have issues designing effective marketing materials.

These same thriving business owners tend to use every type of marketing tool at their disposal:

·         63 percent of thriving small businesses use social media advertising.

·         59 percent use online advertising.

·         46 percent use print advertising.

Fifty percent of total respondents -- regardless of how well their business was doing -- said they do not know how to reach prospective new customers on their own.  


See how our sister company Maryland Local Marketing can help.