You’ve started your small business and things are going fine. But you don’t want fine. You want prove-the-doubters-wrong super-success. Not sure what’s stopping you? If you can’t seem to grow, here are four common mistakes that might be holding you back.
1. Forgetting you’re a business
If your startup is based around a hobby or is something you enjoy doing, it can be easy to forget it is a business. Sometimes just jumping out of bed to do a job you love is enough of a reward in itself.
If your priority is just to be your own boss – and wave goodbye to your old one – then the financial side can be a secondary consideration. At least at first.
Or maybe you’re so engrossed in finding clients and doing business that you simply haven’t got time for appropriate planning and administration – like timely invoicing, and payment chasing.
Whatever your reason is, if you’re neglecting things like planning, budgeting and record keeping, you’ll find it hard to grow.
- Business planning helps you decide what you want to achieve and how to allocate your resources
- Budgeting helps you understand and manage your expenses, and balance them against earnings
- Record keeping lets you track your progress, spot trends and continually improve what you’re doing
We know you didn’t go into business because of your abiding love of admin. But think of it as a necessary evil to achieve your business goals. Read our article on the data that can help you grow your business for more information on business growth indicators.
2. Your products aren’t profitable
Feel you’re working long hours and making plenty of sales, but the bank account doesn’t reflect it at the end of the month? Make sure you look at the profitability of your products and services.
When you’ve been up and running for a while, lots of things about your business might have changed, and your pricing needs to reflect those changes. What worked when you first started out, might not work now.
Look at the profit margin on your products and consider what changes you could make to improve your overall profitability. Should you continue to offer products that only generate a slim margin? Or services that take the same amount of time to deliver but produce less profit than others?
Getting rid of low profit products can free up space, time and energy for products that deliver better return on investment.
For example, a decorating business may charge £25 per hour for painting but £40 per hour to put up wallpaper. With a finite number of hours in the week, it makes sense to try to secure more wallpapering than painting work.
Another way to improve your financial footings is to reduce your expenses. Without undermining the quality or safety of your product, look for savings. They all add up. Check out our article on five ways to save money in your business.
3. Losing your customer focus
Knowing your customer is absolutely key to the success of your business. And that doesn’t mean literally knowing your customers (although who doesn’t love walking into a business and having people know you by name?)
Being truly customer-focused means that every element of your business is tailored to meet the needs of your target customer, providing them with products and services that meet and exceed their needs.
It means having a thorough understanding of:
- Who your target customers are
- What they want, in life and from your business
- What problems you solve for them
- What makes them buy from you, and what stops them
- What they like to read and watch
- Where they shop and why
This knowledge helps you to identify products and services that will appeal to them, understand how best to promote them, and decide where to sell them and what to charge.
If you don’t already know this about your customers – or if you don’t really know who your target audience are – you’ll not be able to optimise your offer or realise your business’ potential. Head over to our sister site, Transmit Startups, for our article on using customer personas to understand your target market.
If you’ve been collecting information about customers and sales, it can become the basis of a successful marketing strategy. You can segment your customers into specific groups (such as women under 35 or people who’ve made two or more purchases) and target them with messages designed to appeal specifically to them. If you’re at this stage, read our article on the CRM systems for small businesses.
4. Misplacing your growth mindset
After all the hustle and hassle associated with starting a business, it can be a relief when you achieve a certain level of stability. And who can blame you for wanting to take your foot off the gas for a while. A certain amount of cruising in your comfort zone can be just what you need.
However, if you want to grow your business, you’re going to need to shake that off and get back into a business growth mindset. That means:
- Getting out of your comfort zone
- Monitoring and improving performance
- Innovating and exploring new ideas
- Taking (considered) risks and learning from mistakes
- Recruiting and trusting staff
- Seeing the value in growth and development
Are you mentally ready? If not, read our article on developing a business growth mindset for information and inspiration that’ll get your head back in the game.
Interested in ways to expand your business or signs your business is ready to grow? Our other articles have helpful advice for entrepreneurs.
If you’ve avoided these pitfalls and its only money holding your business back, see whether our Transmit Growth Loans are right for you.