Lack of Financial Education

Not knowing your key financial indicators and not raising your hand for quality financial advice is by far the most painful mistake someone in business could make. Why is it so? Let me explain; when money is involved and you lose your savings, your retirement or funds for your kid’s education, your health and your holidays, it is a painful experience. Don’t get me wrong, these mistakes will happen and that’s a risk that you are taking on your entrepreneurial journey. I am pointing out that things should not be that hard if you act fast and ask for help when help is sometimes only a phone call away.

Not Knowing YOUR Company’s Critical Success Factors and Key Performance Indicators

Although, we believe that accounting language on its own is insufficient to perform the comprehensive analysis on your business operations; numbers don’t deceive. The only delusion that may arise is if you don’t analyse what numbers are saying to you. You can use accounting information to develop key indicators and monitor performances, set prices and sales targets, examine expenditures and plan for profits and investments.

You must know your Key Numbers!

You need to know when you are on the right track or when you are a way from your plans. Numbers don’t lie.

You need to know to improve where necessary, to strengthen where needed, to eliminate where unnecessary.

Lack of Innovation and Initiatives For Improvement

If businesses are built on strengths as we mentioned before, that innovation is the real cornerstone of power. With innovation, it is all about future positioning and realising how tastes and preferences may affect your products and services in the future, then bringing people, experiences and innovation together.

Innovation is about the betterment, new ways to solve both today’s and the future’s problems. There is probably no other function in any business, capable to skyrocket both the brand and profits. If something is unique, better and creates that wow effect, winning is certain, and prospects are bright.

However, the problem with SMEs is that no one wants to rock the boat. Why improve something that works just fine? Why fix if it isn’t broken? But the truth is far from it, competition doesn’t sleep, the market wants and rewards fresh ideas, new products and better services. Your responsibility is to give them what they need, want and desire.

Not Charging Enough or Giving Your Store Away for Peanuts

It goes without saying; you must recover your costs and have healthy margins to sustain the business development initiatives. When prices are too low and you expect to increase a volume, compensate for low margins. Your business is vulnerable, and you will pay the price. Your pricing strategy must not be positioned around the lowest cost provider idea. This is a must.

You can’t be a market leader if only providing low-cost items, because if the low price is all you have, the next low-cost provider (lower prices than yours) will wipe all you have built in a blink of an eye. Prices can be reduced in particular circumstances, but once you set them to low, it takes a lot of effort to increase them again.

Charging based on value is where your emphasis should be. Unique value, good proposition, fantastic service and communication will make clients wanting and be responding to your offers more, to the point where the price is not longer an issue. Your primary objective is to make your price irrelevant.

Incorrect Project Structuring or Wanting to Impress the Client by Going Way Beyond Expectancy

This is a typical rookie mistake. By trying to impress someone and make them think that you are delivering way over what is expected, you are doing yourself a great disservice. Don’t try to throw everything you know into an assignment (you certainly heard about “he throws in everything but the kitchen sink”, do what is expected and slightly better. Don’t show off and accept projects that typically don’t serve you or provide satisfaction.

There is nothing wrong with providing a little extra here and there to show you feel for your clients. But either way, that’s not what we are discussing here.

Not Having A Strong Financial Supporting And Backing System 

You are aware that; cash is truly a king. The more fast cash you can generate, the better. The financial backing system is all the money you are prepared to risk to give your business a flying start. In other words, your financial support system, aid,  that will supplement your income until your business can afford you. The bigger the reserve is, the better your prospects are for staying in business. Also, know that money is not everything and if you are doing it just for the money you should reflect more on what your business truly stands for.

The Absence of Planning – Failure to Have Solid Operational Plans and Systems in Place

Too many procedural issues, micromanagement dramas, unspoken rules and broken promises are the reasons why so many people decided to quit their jobs and commence own ventures in the first place.

When you recall one of our prior articles, we said that people in a majority of cases, begin business emotionally without any procedural and operational planning at all.

Unfortunately, having no systems to fall back on, to support you, guide and educate any business, is deemed to fail.

I have repeated so many times;  every poor performance can be traced back to some flaw at the critical point within the system. It is almost always about the systems and never about the people. People have good intentions, and no one wants to fail deliberately. Remember this; check the systems (process) first; if everything stacks, check with people.

Marketing Poorly or Not Marketing At All

Marketing and innovation, as explained and emphasised by P. Drucker, are classified as main entrepreneurial duties. They create new customers, opportunities, markets and growth. Businesses, for some reason, often neglect the whole idea of marketing. Innovation is even worse.

We will only focus on poor marketing practices here, and the four main issues that I identified are:

• Weak USP or DVS (EVS)
• Running unsuccessful (institutional) marketing campaigns
• Not measuring results
• Relying on so-called “expert’s advice” too much without validations from your side

First, the central idea about the SME marketing starts with your USP (unique selling proposition), DVS (direct value statement) or EVS (emotional value statement), short statements about why someone should deal with you, buy your products, services, pay for your skills, etc.

If these are not communicated powerfully, who you are and what you offer, what is the reason for me to engage you; there will be no winners with any of your marketing tactics.

Second, it is almost better to avoid marketing than to do it poorly and unplanned. The reason behind this is that your money will probably drain out faster than anticipated without producing expected results. There, again, must be a process. A system that is traceable, measurable, simple and powerful.

Don’t do it something just because everybody around you is already doing it and by all means, don’t believe that you are going to miss the boat. Think first then act fast…