Top 10 Business Bloopers
There are many factors that determine a business’ success but avoiding the greatest blunders would go a long way towards achieving your objectives. From my experience and those of many other entrepreneurs I had a chance to discuss this subject, the following are the worst bloopers you can commit:
1. Hiring wrong employees. Manpower is the foundation of any business but few start-ups have a systematic approach to obtaining the most suitable personnel. There is a strong tendency to hire the first person that fits that meets the minimum requirements. The requirements are also often not ideal for the position. This throws away a golden opportunity to get the best person possible.
2. Lack of working capital. There is a tendency to grossly underestimate the cash needed to nurture the business while it is still in its infancy. Most businesses take some months to reach their maximum sales potential. During that time you must pay the payroll, the rent, electricity, raw materials, and other unexpected expenditures with little sales flowing in.
3. Lack of control systems. Many small business persons believe that their employees are trustworthy and neglect to have a reliable way of auditing their business. Most of them, too, believe that they can institute controls later on. Unfortunately, if you do not have control systems from the start, employees may be offended if you do this later on.
4. Bad location. Although more critical for retail businesses, an unsuitable location is also one of the worst mistakes for other types of ventures. Few take the effort and expense of doing market research to determine the best site. Bear in mind that money spent in finding the ideal location is one of the soundest investments you can make.
5. Too low prices. Very often, I see many entrepreneurs price their products or services too low. There are two main reasons for this common error. First, there is a tendency to forget that overhead expenses must be factored in, and second, the owner’s work is often not considered part of the cost since most owners do not have a salary.
6. Lack of basic business skills. A lot of people start a venture without knowledge of key business skills like management, marketing, and finance. While most people would say that a non-surgeon cannot do an operation, many believe that you can do business without knowing the key business functions. In this context, the result of ignorance may not result in the death of a patient but the closure of your business. All entrepreneurs, especially those with no formal business education, must try to acquire and update their business skills.
7. Lack of supervision. You could not expect a business to operate on its own without proper supervision. Even if you have a manager you still must check and monitor the operations. Getting a franchise may lessen the time requirements, but still, even the best franchise will suffer if the franchisee allocates too little time to manage the business.
8. Unclear image/brand. This happens due to the tendency to add products or services that are incompatible with your brand, image, or market. In adding new items or services, you must consider its effect on your business as a whole.
9. None or too little employee training. Lack of training erodes employee productivity. Even if you hire skilled personnel the current rapid pace of development will soon render their skills obsolete. You also miss the chance for performance improvement if you do not set aside a budget for training.
10. The owner gives up prematurely. The last but most important blunder is if you give up too soon. Almost all entrepreneurs have encountered seemingly insurmountable problems. One must find the strength to persevere in the face of difficulties.
While there are countless reasons for a business’ success or failure, the mortal mistakes above are the reasons for the vast majority of them. Keeping these key blunders in mind will significantly increase your chances of making your company strong and growing for many years.
*Originally published by the Manila Bulletin. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.
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