Key Setbacks to Try and Avoid When Running a Business
by Mashum Mollah Starting a Business 16 February 2018
Keys to success are frequently mentioned in relation to business, but how often are things to avoid when running a business mentioned? Although optimism is a wonderful thing to have and can go a long way when running a business, practicality is also often equally needed. When you see a successful business, it is sometimes tempting to assume that things always work well and go according to plan, but you should know about all of the things that could and often do go wrong. A lot of chaos goes on behind the scenes when building a successful business, so this article will mention a few things that you should avoid in order to reduce the chaos.
Bankruptcy is the word that no business person wants to hear but that every business is at risk of experiencing. Statistics show that less than 20% of businesses make it past their first year which means keeping your head above the water is going to be something that you need to work hard at. This may sound discouraging; however, you could decide to use it as motivation to be amongst that 20 percent. To begin with, one of the ways that you can avoid bankruptcy is by cutting your coat according to your size. Try and always evaluate and assess your spending to ensure that you don’t have several non-essential items on your list. Consider only investing cash in things that add value so that you’ll be getting a return on investment monetarily or in the form of resources. This might mean cutting out unnecessary subscriptions, reducing allowances or finding a more affordable office space. Just try your best to be more economical without compromising on quality if you can. Some other tips to avoid bankruptcy include prioritizing debt payments so that they don’t become out of control and also following your business plan to ensure you’re on track.
Finding out that you have a lawsuit and that a person, employee or organization wants to sue can be every businesses’ nightmare. For one, if the case is lost on your part, it can set you back hundreds, thousands or even in some extreme cases millions of dollars. Another reason that lawsuits are a nightmare is what they can do to damage your brand. The primary way that lawsuits can affect your brand is by creating bad press, especially if the media gets word about your case. If you do happen to end up with a lawsuit for whatever reasons, it may, therefore, be best to find a mediator such as MediatorSelect who can try and resolve the issue before it escalates. It may mean that you end up in some sort of a settlement, but you may find this to be far better than spending money on dragging it out in court and damaging your brand. Not breaking the law, getting insurance, and avoiding copyright, patent, or trademark violations are some practical ways that your business can endeavor to avoid being taken to court. Employee lawsuits also happen to be common when running a business, so ways to avoid them include familiarizing yourself with federal and state laws, consulting experienced attorneys before problems occur, coming up with a corporate structure that protects your assets as an owner, maintaining thorough files and documenting everything.
If you happen to discover the cure for cancer and want to start a business to sell the cure, it’s likely you won’t go far without effective marketing. The most likely way that your products or services will be seen by your target audience is by developing and executing a sound marketing plan. If you fail to do so, it is likely that you won’t make as much revenue as you need to stay afloat which can be crippling for your business. You should have had a marketing plan in place when composing your business plan, however, they do need to be constantly updated in line with current marketing trends and the direction your target audience is going in. For instance, influencers are now one of the latest marketing trends amongst businesses, so incorporating them into your marketing plan might help produce results. There are several factors that make a marketing plan effective and one includes your ability to tell a compelling story. Your ability to tell a good story is what will likely be the bridge that connects you to your audience, so it’s important that you create one that they can connect with. Technical expertise is also needed in order to operate the numerous distribution channels that your marketing will be placed through. It is also important to remember that one of the most effective ways to market is to focus on branding as opposed to selling. This means that your marketing efforts will likely focus on your story as opposed to your products and services which should help your reach target customers and produce more leads and sales.
It can be tempting to cut corners when running a business but doing so could be detrimental to your brand’s standard. For example, if you’re a company that manufactures clothes and are looking for ways to reduce production costs, you may decide to look for cheaper materials. By doing so, you could reduce the quality and standard of your brand, which could affect your customers and brand loyalty as well. Ensuring you do regular assessments of your products and services to make sure everything matches the standard that you’ve set is one way that you can go about maintaining your standard. By doing so, you’ll also maintain a good brand reputation which should help with customer loyalty and also help recruit new customers.
Hiring the right employees can have a positive impact on your business. For one, they are important keys to helping the business function and carry out services. It is, therefore, imperative that you put careful thought and consideration into every person that you want to hire. This might mean carrying out more thorough interview processes or sourcing employees by referral. CEOs often complain about how difficult it is to hire good employees, so it is something that you shouldn’t rush into. If you are a new startup, another challenge may be your ability to afford their salaries as their expectations may be quite high. You can also try writing better job descriptions, embracing digital trends and social media, and keeping your eyes on reviews.
In the incipient stages of starting your business, it is likely that you’ll want to do everything. This could be because you’re trying to manage costs and resources while trying to get on your feet as a business. However, as your business grows you’re going need to learn to allow others to take on roles in the business. Following on from the above point, it is important to hire employees that you can trust and rely on so that you’ll be confident in letting them handle various tasks. The negative effects of micromanaging include hampering employees and making them feel restricted. This could result in poor performance and affect your business operations as well. However, by allowing your employees to make independent decisions, you might even find that your business sees more growth. Two is better than one most of the time, so the more heads that you have on the ground, the more ideas you’re likely to come up with together. If you’re someone who has issues with micro-managing some tips to help could be setting weekly meetings to discuss progress, focusing on results, writing down your own job description in order to stay focused, developing coaching and delegating skills, focus more on managing than leading, and correcting yourself when you find yourself micromanaging. By taking some of these tips on board, hopefully, you’ll be able to give your staff and yourself more freedom.
Not Sticking to Your Plan
You set a business plan in place for a reason, which is most likely to have a compass or guide to direct you. Although you may be emotionally attached to your business if it’s something you’re passionate about, you should try and avoid allowing your beliefs to override the business plan that you set in place. Doing so could result in you making impulsive decisions which could be harmful to your business as opposed to well-thought-out ones that will benefit you. Research is likely to have gone into your business plan, so most of the times its better to work with facts than to work with assumptions. Seeing as there is an exception to every rule, there will be times where you should go with your gut and intuition. You can’t always make the perfect decisions, and business is full of risk, so you just have to try and hope for the best outcome sometimes.
There is no formula that is set in stone for running a successful business. However, here are some guidelines that have been put in place to help push you in the right direction. Mistakes that are made by others are often great teachers and help us avoid the same negative results. Hopefully, you will avoid some key things mentioned in this article and see more success than you do failure.