5 Last-Year Business Mistakes You Can Learn From in 2014
If your business had a bad 2013, learn from these five common mistakes to ensure success in 2014 and beyond.
1. Not Allocating Capital for the Future – New businesses in particular fall vulnerable to under-capitalization. Whether entrepreneurs are unrealistic about the funds needed to run a business or overly optimistic about the amount of free tools available online, this can doom a business. If this rings a bell, make 2014 a frugal year, as NFIB.com suggests, by being overly cautious about all spending and doubling your projected capital for all projects. Seek advice about your business financial projections and cash flow through a mentor or the Aurora Small Business Development Center.
2. Poor Accounting Practices – Businesses new and old can experience poor accounting services. If not checked, this mistake can cause a wide range of problems, from not having enough funds for paying invoices, to billing clients twice or missing payroll. If you had an accounting problem, find a software solution that automates elements like payroll services or accounts receivable, and runs basic reports. Now, when you have 15 minutes, you can run reports and gain an understanding of current finances, so you don’t commit funds you don’t have on hand. The Aurora SBDC offers a QuickBooks for Beginners class in April.
3. Working Too Much – Working too much in the early phase of a business can set you up for trouble. When you’re always on duty, you can neglect relationships that may help you grow, or burn out before you’ve hit that milestone goal. Make 2014 a year of balance by taking your sick days and vacation days, turning off the phone after hours and reconnecting with friends and family. Your holistic approach to work-life balance just may give you renewed vigor in the office.
4. Not Courting Repeat Customers – Repeat customers are the backbone of a business when treated correctly. And turning one-time customers into repeat customers comes down to customer management. If you’ve been focused on growth to the detriment of customer relations, switch up your game. Use a good CRM (Customer Relationship Management system) to track, manage, market to and glean data from customers. Analyze your successes as well as your epic failures, as both have teachable lessons for you. Incentives like discounts, free shipping, loyalty programs or handwritten notes go a long way toward building goodwill and turning one-time shoppers into repeat customers.
5. Not Thinking Through the Repercussions of Decisions – Maybe you allocated funds during a midyear high to hiring a new employee, then didn’t have money down the line to devote to purchasing new equipment when something critical broke. Or maybe you splurged on office equipment, then couldn’t afford to pay for staff training or trade show attendance to grow your business. Experience like these teach you how to better forecast when decision-making. If you were burned in 2013, weigh the pros and cons of spending on a need. As you pitch the case to yourself, you can determine which option makes the most sense.
- by Steve Chopper, a marketing grad who reviews business apps for a number of small biz blogs.