Is Your Business Making Mistakes?
Things are tough and the team at Gladstone Regional Job’s understand that and will continue to offer cost affective solutions to regional businesses.
Based on valuable research from world leaders, this article is purely about the mistakes we make. It’s not some huff and puff you might read about or hear from those who claim to be selling you the answer to all your problems. As business owners, it’s important to be able to stand our ground and understand what is right and what is wrong.
Below are 10 mistakes both new and existing business owners make and something we can all learn from to better our chances of success.
1. Focusing On The Topline, Not The Bottom Line.
With a population of less than 45k people, you could say that Gladstone is a small city, therefor the chances of us hearing someone we know talking up their business is reasonably high. In many smaller and more regional cities, if a business owner hears that one of their competitors has hit $2 million in sales or that they now employ 15 people, their first instinct is…. how can I beat that!
What many don’t stop to understand is that a smaller business could be operating at a much higher level of profitability and make them a better business overall. Every dollar we earn, the dollars that reach our bottom line are a lot more valuable than the revenue we have coming in at the top!
So rather than get caught up on what your competitors are doing, we should be looking at things like streamlining our business, saving on required inventory, improving the way we manage taxes and so on. As business owners, many of us are stubborn, we know best, but do we focus on the increasing our bottom line dollars with sufficient accuracy and skill?
2. Diversifying Prematurely.
Where should you invest your profits? It amazes me that a very very small percentage of business owners actually invest in their own business or themselves. “Focus, don’t diversify,” “Build opportunity for your business by retaining the cash in your business as an opportunity.” Global leaders suggest that cash is your best first investment as it allows you to make good choices.
When you’re low on cash you accept bad clients. “Time terrorists,” but when you have sufficient cash and apply it to the things that you know, you can grow. It is most valuable to invest in your own business, and after that, invest in the things that you know.
There are no bad investments, just bad investors.
3. Failing To Focus On The Right Value Equation.
Dollars follow value! The two greatest forms of capital in a business are the mental capital (your product and service expertise) and relationship capital (your audience, platform, organization, clients, family and friends). Mental Capital + Relationship Capital = Financial Capital.
When these factors are in balance, your business can shine. When they’re not aligned, however, the effort to work harder on a bad philosophy will not produce good results. Bad outcomes occur when you see an owner living outside of their means attempting to run the business like a treadmill as a means to keep up. Or perhaps the owner is attempting to run a value proposition that worked for someone else or for another set of customers, but isn’t well suited for them
When the business fails to match its value proposition to its natural platform and audience, things will seldom go well.
4. Failing To Realize That Rookies Stay Invested, But Professionals Sit More Fully In Cash.
Have you ever noticed that the greatest investors are typically sitting in cash, not investments, for a surprisingly high share of their time? Likewise, business owners feel too strong an urge to invest in “this and that” and are not invested strongly enough in protecting their liquidity by maintaining sufficient buffers of cash. What is the greatest cause of business stress and eventual failure? Generally, it’s not a problem on the balance sheet. It’s the lack of sufficient operational cash.
5. Failing To Invest In People. Too many business owners hire too cheaply, this is flawed thinking. Instead, they should be hiring the best. They should also invest in the technology and expertise that allows them to streamline procedures and to eliminate the necessity to duplicate processes wherever possible as the company grows.
As a result of so much negative feedback and a combined 18 years in recruitment, our 40+ thousand Facebook followers deserved a more professional approach to applying for a job, not just a two sentence Facebook post for a job paying $70,000 PA. This is the reason our team created the exclusive platform your reading from now where businesses can showcase themselves professionally while managing applicants through our free applicant management system.
6. Failing To Realize There Is No Such Thing As A Passive Income.
There is never something for nothing. Recurring revenue creates less work as time goes on, and is a worthy goal to strive for, but if you don’t manage the revenue at every stage, ultimately, the efficiency of outcome and even the revenue itself will go away.
7. Doing Too Many Things Themselves.
As a business owner there are things you do better than anyone you know, and so you continue to do them yourselves and procrastinate the hiring of others to handle those tasks, or you avoid paying for quality. You say that if you want it done right, do it yourself? This is flawed thinking that doesn’t allow your business (or even your own capabilities) to grow.
Many say to me, they can’t afford to hire someone…… this is like saying you can’t afford to grow.
8. Listening To Financial Managers Who Have A “Cut Back” Mentality.
The worst advice financial managers give business owners is to tighten your belt and cut back on spending, but they can’t tell you where. Or for start-ups or micro business owners, in a similar vein, they tell you to augment your business cash flow by getting a second job. Really? If you’re a dentist and you take a second job, you’re no longer my dentist.
This is a reduction mentality instead of a production mentality, and is fundamentally flawed. If you used that time instead to properly focus your attention on your business just a little bit more, you’d succeed. If you strive to survive inside the local box, expect to hit a wall!
9. Thinking That Simply Working Harder Will Move Your Business Ahead.
The least understood and most valuable commodity towards growing a business is strong vision, and the ability to articulate it well. As a great example of this, some may remember JFK going on television in 1961 and saying we’ll get a man on a moon within this decade and we’ll get him home safely. NASA showed up for work differently after that happened.
How can owners increase their own vision? People get better vision when they learn to take better care of themselves as an asset. Consider spending fewer days at work than you currently spend. People can’t operate properly when the owner is always available. Owners are the cheapest labor available when they’re always there to solve problems. The team never gets tested or upheld, and the business owner burns out. Days out refresh the mind and allow the team to learn to make better decisions.
When you think about it, most people are doing nonproductive things all day long. Create the opportunity for them to step up, and in most cases, particularly if you’ve hired and trained correctly, they won’t disappoint.
10. Thinking You Have To Work More To Get More.
If you’re making $100K a year and you find out others in your role are making $125K a year you’re suddenly unhappy right? But when you really address the strategy of your company, you’ll recognize the ways to increase your efficiency, your team’s productivity, and the reach of your business–and your profitability and income–without working more, simply working more strategically and better with the resources you already have, or are within your available reach.