This is a guest post by Sarah Williams.
Hindsight may be 20:20, but in the business world neither your bottom line nor your reputation are immune when it comes to making costly mistakes.
For the past 8+ years my company has been chugging along quite nicely but it is still, even now, carrying the burden of simple business blunders made at its inception. Unfortunately, being the young, headstrong buck that I was, taking advice from older and wiser heads was not my forte and thus I paid the price of my foolishness.
Hopefully, my hard lessons learned can at least be of some value to others out there who may be thinking of, or who are actually ready to, embark on the exciting yet fraught world of self-employment.
Blunder One: No Staff Training
A great place to start when it comes to disaster prevention is staff training. And whilst there are a number of options for this currently out there, my best results were obtained using Work Active (http://www.work-active.com.au/manual-handling-training.html). They were able to set in place plans, safety procedures and work practises to allow my employees to work safer and more productively.
Don’t leave this until it is too late, trust me on this one.
Blunder two: Poor Product Choices
Let me give you a quick example of what this means:
At a party recently, I was grabbed on the arm by a gentleman, who enthusiastically began to tell me about his new business venture. His intention was to sell quality, handmade corporate gifts which could be retained as heirlooms. As he spoke his passion was obvious, but it was also plain to anyone but him that the $5,000 price tag for these gifts made them a specialised item with an extremely small market base. In his case, this should have remained what it was, an expensive hobby.
Do your research and follow sales data.
The market is changing constantly and things that were highly sought after only a few short years ago (think watches, cameras and radios to name just a few) have now been replaced by iPhones and other devices.
Blunder three: Bottom Line Burdens
In almost every start up business, the bottom line is god.
Cash flow can dry up very quickly, and staff wages still needed to be paid. With this in mind, the idea of hiring casual staff or consultants can make a lot of sense. A consultant will invoice you only for the hours they have worked which can avoid a number of costs associated with a permanent employee.
Choose wisely and you can find one clever, hardworking, multi-skilled employee is worth four who aren’t.
Blunder four: Not Diversifying
Diversifying benefits your business by not limiting your client base or field of expertise to a narrow range.
If work dries up, then it’s a bit late to start looking for ways to expand.
Let me give a quick example, I started out providing services in the health sector, as it is the field I came from. With a little vision I could have seen how my talents could have rolled over into any number of other areas but I didn’t. Thus, when the government slowed spending on health, I felt the pinch.
It pays to be a bit versatile!
Blunder Five: Not Planning for Success
Creating a business plan, a budget and forging a contingency plan makes good sense.
It is also a strategic method of forecasting the resources which will be needed in the future, by calculating the rate of growth you are expecting. Financial blow-outs and market downturns have to be preempted, so their effects can be minimised. Ignore these at your own cost.
Short of investing in a crystal ball, there is no definite way to avoid all the pitfalls that can arise when running a business.
The best you can do is to make preparations in advance to ensure that any business blunders and their effects are minimised. Hopefully, you can learn a few lessons from my experience, and be on the road to success sooner rather than later.