Sins – every business owner is guilty of them now and again. But which deadly sins could bring your business down?
If there was a small business bible, these would surely be the seven deadly sins to avoid.
Dr Lara Moroko, a lecturer at the Macquarie Graduate School of Management, says business owners who take too much cash out of their business risk losing everything.
“Taking too much salary out of the business is like sucking the air out of the business,” she says.
“So many people don’t budget and haven’t got enough money to live off. Problem is, the business needs cash to keep going.”
Those with an over-inflated sense of skill may consider themselves above the business planning tasks most managers deem essential. But such pride is a curse. Xero Australia managing director Chris Ridd✓ recommends developing a clear vision to steer a business in the right direction.
“It’s crucial for business owners to set goals, because otherwise they’ll just get caught up in the day-to-day running of their business instead of taking control and driving growth,” he says.
“Firstly, you need to set concrete goals and a deadline that you can measure your progress against. Secondly, just setting goals doesn’t make them happen. You need to map out how you’re going to achieve their goals.”
Controlling your temper when it comes to irate and irrational customers is a difficult task for even the most patient business owners. Before you commit this deadly sin, remember that it takes years to cultivate a good reputation and just one unsatisfied customer to ruin it.
“Instead of losing it with complaining customers, hear them out,” Moroko says.
“Ask them what they would like you to do to fix the problem. They may have suggestions on how to improve customer service.”
Lust for the latest mod cons in the business world is a trap many fall into. Elephant Property owner Kirsty Dunphey says it’s a sure-fire way to kill off cash reserves and with it, the future of the business.
“I’ve seen so many small businesses go under because they were insistent they had to have the $10,000 photocopier to start, or the huge shiny office space, or the important looking cars,” she says.
“I’m a big believer in bootstrapping at the beginning and keeping an eye on costs all the time. It should be an ongoing process regardless of the size of your company.”
Green-eyed business owners who are envious of their competition can easily sacrifice their own goals. No matter how successful the competition appears, Moroko says business leaders should march to the beat of their own drum.
“When you let envy of another business set your strategy instead of setting your own goals, you lose focus,” she says.
“You’re keeping too close an eye on the competition and losing track of where you’re going. And when that happens your resources are stretched too far and it’s just a disaster.”
This is perhaps the most common deadly sin of them all. Slothful business owners who fail to perform the difficult, yet important, tasks such as keeping their financial records up to date, face going under.
Nicole Jones, owner of marketing solutions business Market Me Marketing, says a basic but often ignored responsibility is keeping in contact with customers through building an email database.
“The rise of social media took the focus off email marketing as a way of communicating with potential customers and a way to keep people informed,” she says.
“Many business owners thought that email marketing was dead. But it isn’t, and it’s still one of the most effective ways to get your brand back in front of customers and potential customers.”
Greed can destroy small and big, new and old companies alike. It all starts to unravel when greed dictates pricing and customer service, Moroko says.
“Greed is thinking you can charge or do what you want to loyal customers, thinking they’ll never leave you,” she says.
“The truth is there is always going to be another business out there who is hungrier than you, ready to snatch your customers away.”
*Original Article: http://www.theage.com.au/small-business/managing/the-seven-deadly-sins-of-small-business-20140920-10jbq7.html