No one starts a business with the intention of making it fail. However, entrepreneurs are only humans, and they can make mistakes when starting and running their business. Some of their blunders are harmless and innocent, while others are dangerous enough to jeopardise the stability of their business. If you’re an entrepreneur, be aware of these mistakes and steer clear of them at all times. Here are some of the lapses that you must avoid:
1.Failing to build an emergency fund
Building a backup fund will help your business survive during hard times and have enough funds to stay afloat until things get better. It also allows you to quickly take care of any unexpected expense and resolve issues before they get worse. Having emergency funds to dip into likewise reduces the need to take out business loans and helps you avoid paying high interest rates.
2.Not paying attention to cash flow
Some entrepreneurs believe that they’re good to go as long as they’re getting sales and profits, but this isn’t really true. Aside from generating leads and revenues, you must also keep an eye on your cash flow and ensure that your business is spending less than what it’s making. By achieving a positive cash flow, you’ll always have enough funds to cover your rent, payroll, supplier payments, and other obligations and keep your operations running. Improve your cash flow by using these tips:
- Find ways to lower the costs of running your business. Even the smallest savings can accumulate over time, so don’t hesitate to implement changes to your operations if they save you money and won’t affect the quality of your production.
- Keep outstanding invoices at a minimum since they can tie up your cash flow. Offer discounts for early payments to encourage your customers to clear their invoices ASAP, and penalise delayed payments by charging late fees.
- Negotiate for lower fees with your suppliers. There’s no harm in asking, and you might even be surprised with how many of them will agree to reduce their rates (which is highly likely especially if you’ve been a good payer and a loyal client).
- Lease your equipment and furniture from trusted companies instead of buying them outright. Leasing allows you to obtain high-quality machinery and office furnishings while keeping your initial outlay at a minimum and saving your funds for other necessities.
3.Making compromises on cybersecurity
A lot of entrepreneurs don’t really pay attention to cybersecurity threats since they believe that their businesses are too small or too obscure to be a target. However, the reality is that any company—regardless of its size and scope—can be a victim of cyberattacks and have their important data severely compromised. So, even if you own a newly established startup or a small business, you need to make cybersecurity a priority. Safeguard your business safe from online threats by:
- Setting long and strong passwords on all of your business accounts and updating them regularly. Remember to implement multifactor authentication for each account as well. If you have employees, make this a company-wide rule so that no one will compromise your cybersecurity.
- Installing firewalls and antivirus software in all of your business computers.
- Regularly updating all of your software and computers.
- Ensuring that your workplace Wi-Fi is always hidden, secure, and fully encrypted.
- Keeping up to date with cybersecurity news to learn about the latest threats and know how you can protect your business from them.
4.Refusing to use modern software
Many business owners make do with basic software to save money while getting their operations up and running. This is definitely a great idea while establishing your business, but there will come a time when basic programs won’t be enough to keep up with your business’s growth. When this happens, it’s best to switch to better software that will help you become productive and efficient while saving time and effort.
There’s a broad range of software options to choose from, which means you can find a program that has most (if not all) of the features you need to streamline your operations. One excellent example is Acumatica MYOB, which is a end-to-end business management system that collects data across multiple departments (such as finance, sales, production, and customer care). It then uses this information to automate your business events, generate reports and dashboards, and disseminate important updates to the entire team in real time. By using Acumatica MYOB, you’ll eliminate time-consuming manual workflows while allowing your employees to collaborate in a more seamless and efficient way.
5.Neglecting employee morale
Having productive staff will help you achieve long-term success, so you should prioritise employee retention and satisfaction and keep your team members motivated to do their best each day. This way, you’ll increase your productivity rates and hit your short-term and long-term goals while fostering a positive workplace culture, which can boost your brand image and help you build a reputation as an excellent employer. You’ll also lower staff turnover rates, which means you’ll retain talented and reliable employees and avoid the cost of hiring and training replacement staff.
6.Forgetting to track your progress
You can’t determine if you’re on the right track if you won’t take the time to notice where you’re going. So, no matter how busy you are, make it a habit to check your business’s progress in the past month, quarter, and year and see if you’re achieving your goals according to the ideal time frame. If your business isn’t hitting its goals or growing as quickly as expected, go through your operations and processes, find out where you went wrong, and make the necessary corrections ASAP. This way, you can identify the roadblocks that are holding your business back and minimise or even eliminate them before they create bigger problems.
It’s normal for entrepreneurs to make mistakes in managing their business. However, by learning more about these blunders and steering clear of them, you’ll increase your profits and productivity while bringing your business closer to success.
