A Guest post by John Stone
In a contemporary world, all business is conducted through instant access and constant connections. All data is digitalized, every record filed, every operation is as transparent as it possibly could be. This standard of business is imposing quite a few challenges for both small businesses and large enterprises.
Working with an ineffective and improperly monitored system could lead to a series of micro-cracks, which can bring your whole organization in an unpleasant situation. This is even more important for the small and mid-size companies, because their assets are limited and often without an appropriate insurance, when compared to large global enterprises.
To keep your revenue growing and your system flawless – your company has to operate at top efficiency. However, this is easier said than done. You have to ask yourself: Is your financial plan practical and cost-effective enough for your business to enjoy a longstanding economic success? Does your insurance plan covers all possibilities? Is your business model scalable? Moreover, can you retool your establishment when you’re already deeply rooted in your systems, financial and management procedures?
In the following list you will find five critical mistakes that may break your business. Learn to avoid them.
1. Rushing with Expansion
This happens to many business owners. Their logic simple: the bigger their company gets, the better their bottom line becomes. However, their logic is flawed – growing too quickly means that the appropriate training and systems cannot be put in place correctly. When your company is small, the workflow is conceived fittingly and if you expand too quickly, you cannot alter it properly. Take time to comprehend the difficulty of this task and approach every venture with caution. Thorough research and a safety net of insurance are highly recommended.
2. Wrong Implementation of New Technologies
People can often be persuaded by a PR that a piece of hardware or software can make their workflow ten times easier. You cannot tell if any software will provide an answer for your needs before you test it. You should always demand a demo version, so your employees can inspect if it suits your company’s needs. The first thing you need to think about before making a technology decision is consider how will it benefit your personnel, because they are the ones who will be affected the most. With every new technology implemented – insist from the app vendor to provide an appropriate training.
3. Disregarding a Need for a Financial Plan
Flexibility is what makes a financial plan effective. Many times, people don’t even know where they stand with finances. You should start by taking a “financial snapshot” so you can have a clear picture where you are today. A financial plan should be revisited at least once a year, but if you lack time or competence, you should always seek for a professional help. A financial advisor is the best financial decision that you can make. As a person in charge, you don’t want to spend too much time managing thing that you are not certain of. Assign a task to a skilled professional, invest in your bottom line and move forward.
4. Excessive Workload
When one member of an organization quits, usually his workload is dumped on another operative in hopes of saving a dollar and time on finding a suitable candidate. Even if it is just a temporary solution, this creates one of the worst obstructions to efficiency. Once your employees reach a certain capacity with their tasks, their productivity will drop exponentially. So if you expect effective work from them, you should make sure they are not overloaded. Talent acquisition is important, but proper organization of your high performance workers is crucial.
5. Collecting your debts
Unfortunately, collecting your firm’s debts is always difficult, no matter the industry that you are in. Most of those types of clients usually fall into one of the three different categories: they have difficulties with finances and can’t pay you right now, they routinely evade payments due to their priorities or they decided not to pay you back at all. If a person evades you for more than a month, you should contact some professionals who deal with debt recovery help. A long wait can limit your ability to invest and grow, hurting your cash flow and effectiveness. Sometimes you are simply assigning this cost as a price of running a business, sometimes your clients count on the fact that it is not profitable for you to pursue them, so always have insurance and a signed contract.
Keep your business productive and lucrative by watching out for the crucial mistakes mentioned above. Small businesses are of vital importance for the global economy, let’s keep yours running smoothly.