Growing a business from scratch isn’t without certain pitfalls. Here are nine ways you might be sabotaging your business without even realizing it.
BY FAISAL HOQUE
Having a company in startup mode can be one of the toughest endeavors anyone can undertake.
Long hours, sleepless nights, and anxiety lurking around every corner are what make a positive outcome that much more rewarding in the end.
However, growing a business from scratch isn’t without certain pitfalls.
Here are nine ways you might be sabotaging your business without even realizing it:
1. Doing it all yourself
Doing everything yourself can be tempting in the beginning, when funds are few and ambitions high. While there’s nothing wrong with a hands-on approach, taking on more than you can handle, especially in areas where you lack experience, can be damaging. In the era of the global freelance economy, it isn’t difficult to find talented expertise, but you have to know where to look for it.
There are now dozens of websites and online marketplaces that provide specialized resources — from design, development, and sales to finance, legal services, and banking.
At the beginning, you can try small projects with low investments. The trick is knowing exactly what you want done and putting resources toward accomplishing tangible goals.
2. No brand identity
The biggest myth in business is that the only thing you need is a good idea. A good idea is a wonderful starting point, but finesse and execution can make or break you in the end. Design, wording, positioning, and branding are the cornerstones to success.
Your business plan shouldn’t just have growth projections, it should have ideas about how you want your business to look and feel. Most importantly, you should know how your target market is going to find out about you. Don’t have a major marketing budget? Create compelling content for publisher and social media sites to get your brand out there.
3. You don’t seem credible
People are less likely to invest in you, speak to you, buy from you, or partner with you if your business doesn’t pass a simple credibility check.
No, we’re not talking size of workforce or money here. We’re talking about your personal experience and brand, your relevance/credibility to your new company, completeness of your product/service offerings, reputation, your company’s overall presence, and more.
People are intuitive, and they work too hard for their money to invest in a company they can’t be sure of. That’s why, wherever you can help it, make sure your business has the appearance of a buttoned-down organization.
4. Thinking money doesn’t matter
So, you were finally able to get the seed money you needed to get your business off the ground. You’re thinking it’s the perfect time for the office space in the city, some fancy gadgets, and a couple more employees. Wrong!
Spare every expense. The first three years are key, and once you can look into your business account and see more than just seed money, that’s when you can start making some major purchases. Until then, pinch every penny and cut every corner. You’ll thank yourself in the long run.
[Photo: WorldBank/Flickr]
5. Not using social media?
If you’re the proud owner of a small business that aims to provide goods and/or services to a niche customer base, social media is a must. Recent statistics show that up to 30% of all referral traffic comes directly from social media.
Yup, that’s right, the more you tweet (the right content), the more your potential customer/partner contact grows. If you’re not sure where to get started with social media, observing others can never hurt. What CAN hurt, however, is not using social media at all.
6. Bad customer service
The worst thing that you can do is disregard your customer’s needs. We’ve all heard the old adage, “the customer is always right.”
Putting aside the clichés, responding patiently and positively to clients and customers can lead to fruitful relationships and positive word of mouth.
A 2% increase in customer retention can have the same effect as decreasing a company’s costs by 10%. To put it another way, reducing customer defection rates by just 5% could increase profitability by 25% to 130%, depending on the industry.
Successful retention starts with the initial contact a business makes with a customer and continues throughout the lifetime of the relationship. Bain Capital has even estimated that for certain industries, a 10% increase in customer retention is roughly equivalent to a 30% increase in a company’s value.
7. Not focusing on a scalable sales model
Creating a unique product and a unique brand isn’t enough. It takes repeatable sales processes to create a scalable business. It is one thing to sign up a few customers; it is another thing entirely to identify, design, and implement repeatable sales and customer-delivery processes.
You have created a repeatable and scalable sales model when:
- You can add new hires at the same productivity level as the entrepreneur or the sales leader.
- You can increase the sources of your customer leads on a consistent basis.
- You have a sales conversion rate and revenue that can be consistently forecasted.
- The cost to acquire a new customer is significantly less than the amount you can earn from that customer over time.
- Customers get the right product in the right place at the right time.
A repeatable sales model builds the platform to scale. Don’t have the expertise or the resources to build a repeatable sales model? Focus on building distribution partnerships that can create a repeatable and scalable sales engine.
8. Inflexible leadership style
To continue growing, entrepreneurs, managers, and business owners must become the leader the business needs for each particular stage of growth. And since a company’s needs change at each stage, its leaders need to keep evolving at the right pace. That requires introspection, self-awareness, and a keen sense of strategy — both in the short- and long-terms.
An adaptive, flexible leadership style comes from being mindful. Our individual, interpersonal, and working lives are all interconnected. By being mindful, we understand those relationships and how best to utilize them to create, innovate, and lead.
And that allows us to arrange our lives and our organizations in a way that leads to long-term value creation. Indeed, the most sustainable way to create value is to continually invest in our capabilities, both as individuals and as organizations.
[Photo: Flickr/I .. C .. U]
9. Anxious and stressed
Most small business owners consider managing the ongoing success of their business to be twice as stressful as maintaining a healthy relationship with a spouse or partner, nearly three times as stressful as raising children, and more than four times as stressful as managing their own personal finances, according to a Bank of America report.
The survey indicates that small business owners routinely forgo personal priorities to keep up with business demands.
The stressors can be relentless. But if you’re not happy, healthy, and motivated, you can’t create a business model that provides a positive market experience.
You also set the tone for everyone who works with you. Nobody wants to do business with a grouchy, bitter, and exhausted owner.
Therefore, investing the time and effort to adequately take care of your physical and mental well-being will further increase your chances for long-term success. Mental health is not just about going to the gym to let off steam. It’s about achieving a state of mental calmness to see you though the relentless challenges.
[Feature Image: Flickr/Jeremy Keith]
Copyright (c) 2015 by Faisal Hoque. All rights reserved.
Original Article @BusinessInsider.
