Five Mistakes 'Successful Business Owners' Avoid
by Travis Snider, EvCC Small Business Accelerator Lead Instructor and Business Coach
In the last year, I talked with many business owners about staying afloat in this economy. Everyone has horror stories, but few have answers. “Successful Business Owners”, those who have created resilient businesses and survived previous recessions, tell me that by avoiding a few mistakes, it’s much easier to weather the storm.
1. Operating without a plan
Most small business do very little planning. Working hard and taking what the economy gives is noted as a key to success. But not knowing where you’re going and what to expect leaves a business owner without perspective. If you have no idea of outcomes, how will you know when you’re off track? Planning includes having a vision for the future. How big will the business be? What products and services will be offered? Who are the customers we want to do business with? “Successful business owners” continually communicate the vision and maintain a plan to get there.
2. Not understanding your profit drivers
Profit drivers are factors that affect profitability. Profit drivers produce performance. Other key indicators only measure it. By identifying the drivers and managing them, you gain significant control over results. Which factors most affect your bottom line; is it the number of hours billed to customers; the level of pricing used; or the intensity of selling efforts? Scan your key indicators. Which are drivers and which are measurements? “Successful business owners” focus on managing the drivers.
3. Not attracting enough attention to what you sell
What does it take to get attention from potential customers? Who’s most likely to buy our goods? How do we find them? What will get their attention? I hear these questions frequently indicating owners don’t thoroughly understand customers and how to reach out to them. Businesses engage in many activities including newspaper ads, direct mail, networking, writing and public speaking to name a few. These efforts often don’t get attention because they fail to generate sufficient leads for new business. Owners can be satisfied by taking some action and spending considerable sums of money. But they stop short of demanding an adequate return for their effort. Marketing is only successful if it leads to new prospects and increase sales. “Successful owners” always focus lots of attention on their companies.
4. Not selling relentlessly
Acquiring new leads is important in generating business. But the selling process is vital. Selling is usually a part time effort in the small business. Selling drops away when business is good and the owner is forced to be a producer. The roller coaster of selling, producing and selling again is chaotic. Since marketing and sales is the least favorite task of business owners, it’s the easiest to avoid. There is no pattern for selling and few reminders of things that should be consistently done. A lack of sales can usually tied to a letdown in the selling effort. “Successful business owners” are always selling relentlessly.
5. Not focusing on results
Business owners are hard workers. With so much to do, it’s hard to get it all done. But, not focusing on results is a big mistake. Without looking at results, you don’t know what’s missing. Regular review of results can save thousands of $$ with adjustments when you are aware of gaps in the plan. “Successful business owners” understand they can only manage when they measure. Improving results is about doing the right things. Avoid these five critical mistakes and your results should improve dramatically, even in a tough economy.
Travis Snider is the EvCC Small Business Accelerator Lead Instructor and Business Coach. Contact him at accelerator@everettcc.edu