THE 7 MISTAKES THAT ALL SMALL BUSINESSES MAKE!

So you have survived “The Wave” numerous times and yet you just can’t seem to pin down the reason you keep going down there again and again. 

By Michael Said

Einstein’s Theory of Insanity states that ‘Insanity is doing the same thing over and over again and expecting a different result’.

I’m sure there are days when you feel you must have been insane to voluntarily give up the security of your steady job with all its benefits, set daily hours and free weekends!  Well, let’s not get into those strait jackets just yet…

Remember, you are not alone. Almost every business owner I know has made most of these mistakes, including me, and if you are just starting up, try to avoid at least some of them.

Let’s look at the seven mistakes that all small businesses make, and see if we can do something differently!

1. ’I’m not very good at marketing’

Small business owners often try a bit of marketing - perhaps a flyer or brochure at busy traffic lights, a small ad in the Yellow Pages or the local newspaper or banners on a website. However, precious resources are often wasted on marketing that doesn’t work.

TIP: How to save yourself money on ‘wrong’ marketing. 

Use a different extension number on each marketing item; e.g. put extension ‘1’ on your flyer, ‘2’ on the banner, ‘3’ on the Yellow Pages insert and ‘4’ on the newspaper ad. When a caller asks for a particular extension your reply will be “I’m afraid that extension is busy, may I help you?” After assisting the caller, tick off the extension he/she requested on your ‘Where I spent my money on marketing’ list. You will soon see which marketing methods are most effective.

2. Going in without a business plan 

This is an issue on which experts stand divided. Many of the best business plans are carried around in heads, but obviously you cannot approach a bank or funding source without a detailed strategy covering your marketing, sales and financial forward planning. If you are not applying for finance, draft your business plan in a format that suits you. If, however, you have to go the finance route, there are excellent templates available that can be obtained from financial institutions or the web.

Personally, I think a Marketing Plan is more important. Most business plans focus on cash flow and while healthy finances are crucial, it is equally important to know how you are going to get the money in the bank.

When travelling around the country consulting to small business owners, the most popular answer to the “What is the problem?” question is, “I have a cash flow problem”. Of course, when I look at the financials I quickly see the real problem - there is no cash to flow. What these owners really have - is a marketing and sales problem. If the marketing and sales plans were in place, there would at least be cash flow to complain about.

3. Doing things the wrong way round

Unless you are Jenson Button you do not need a fancy, fast car. You will no doubt need a car, office equipment and maybe even an office, but these don’t have to be fancy – don’t spend money unnecessarily. Make the money first, spend it later.

4. Thinking it’s all about you

Just because you think it’s a good idea, doesn’t mean everyone else will. I recently visited Alexandra Township with my good friend Boetie and noticed a remarkable business opportunity… In the entire Alex there is not a single shop selling swimming pool chemicals and swimming pool equipment! When I mentioned this to Boetie he almost wet himself laughing. “There are no swimming pools in Alex”, he roared. Well, that just goes to show, a little ‘local knowledge’ goes a long way. It’s not about what you want or like, it’s about what your market wants and likes.

5. The worst number in the world  

For small businesses, it’s number ONE: one person, one idea, one client, one source of income. If any of these fall by the wayside, you’re in real trouble. Many small business owners dream of landing that one big government contract – until you actually get that big government contract! After a hefty dose of dealing with one, possibly high-maintenance client, you will be dreaming about lots of little private contracts instead. Why? Because they pay.

6. Ingratitude

When we finally get it right, we often forget to thank the people around us; our spouses and our children who stood by us and went without life’s little luxuries. We forget the people who gave us money and we forget to thank our clients. We think the fact that we have arrived is all due to us. So, we give ourselves a pat on the back and we move on.  

Great entrepreneurs have one skill lacking in others. When things go really well, they look out the window and see who they can thank, and when things go wrong, they look in the mirror and know exactly who to blame. The rest do it the other way around. So ask yourself, which of these are you?

7. Following the herd 

It is easy to fall into the trap of thinking that because somebody else is doing something, we should follow. If you want to be seen as set apart from the herd, rather than worrying about an original idea, focus on finding something original about your idea. Work on that, expand on it, sell it – make people sit up and take notice.

In the next issue we step up the action by showing you how to start doing things differently and get your business flying!

Brand Strategy
www.brandstrategy.co.za
info@mikesaid.co.za
+27 11 468 3138