According to the various surveys run by the independent organisations, half of the new businesses will be forced to close their doors within five years, and two-thirds of them will close within a decade.
With more people than ever starting businesses, surviving and growing in a competitive marketplace is more challenging than ever. Small business owners are ambitious and want their businesses to grow. Understanding which numbers to focus on and what condition is best for business is crucial.
Here are five tips on how to effectively grow your business and avoid some of the most commonly made mistakes.
Forgetting that cash is king: Poor cash flow is one of the largest contributing factors to business insolvency – let alone trying to grow a business. Don’t have too much cash tied up in stock, raise bills as early as possible, pre-payments and milestone payments. Receive payment by Direct Debit if possible.
Undercharge: Undercharging means failing to value time, expertise or resources properly. Selling services or products too reduced price often drives to becoming a so-called “busy fool”. There is a clear similarity between our customers who charge premium prices and strong cash balances and margins. A strong cash balance makes it possible to safely invest to grow. No cash often indicates no growth.
Neglecting the pipeline: Some businesses deliver project-based work. Their services can be in high demand for one month, and low demand the next. When you’re in the middle of one project it’s very essential to remember to continue to work the pipeline, lining up the next project so that there is a constant supply of work in the time ahead.
Success will come overnight: Great cities and structures, and even thriving businesses were not built overnight; they all need hard work and determination. While an entrepreneur might have a great idea and quality services or products which customers want, there can’t be an expectation of a large payday instantly upon launching a business–it is a slow and steady build.
Be realistic and set a timeline that contains small achievable goals and successes. Focus and dedication, executed on an enduring level, will finally deliver success.
Refusing To Delegate: If you’re like many other business owners and you feel the necessity to do everything by yourself, stop. Now. Not only will you hurt yourself out, but you likewise will not be as efficient as you would like. This is why you must learn to delegate effectively.
It is essential that you surround yourself with the best people. Make sure that you assemble a team of skilled people that will make up for the areas in which you are vulnerable. Even if you have a small business you cannot succeed without a decent team.
You need to learn to be an effective leader. In order to prevent turnover, it is necessary that you stay connected with your team. Show them that you truly care about their ability and they are important to your organisation.
Remember that as you succeed in the business you will have to work harder to keep your clients happy. This is because as your company grows, your customer’s expectations will grow and you always have to give your best.