Last year, Dick Smith collapsed in a dark end to what was once successful business. The commentators said the business “didn’t need to fail” but the management was out of its depth.
As a small business owner watching your enterprise grow from an idea and a business plan document into a full-fledged company that one day will be ready to expand, this is your worst nightmare.
There can also be a steep learning curve that comes with being in charge of your own SME and the more you read and learn the better prepared you’ll be.
Want to try to sidestep some of the problems many small business owners run into? Here are several of the most common mistakes small businesses make and how you can avoid them.
Understand cash flow
The concept of cash flow is important to understand if you want to successfully maintain or grow a small business. Of course, knowing how much you’re spending and how much you’re earning is important, but being conscious of the timing of the influx and exit of cash into your business is also key. You also need to know how to smooth your cash flow should you run into issues. An unsecured business line of credit can give you the breathing room and flexibility you need to handle unforeseen issues.
Listen to your customers
Whether it’s direct customer feedback or you and your team analysing the behaviour and activity of the people who use your product or service, using information you gather from your customers can keep you headed in the right direction. Is their demand outweighing your supply? Are you getting repeated requests for a different service, product or process? The people you’re targeting with your product are whose opinions you should be caring about. Don’t think you always know better than everybody else; listen to what your audience is trying to tell you.
Don’t try to get too big too fast
It can be tempting to try to cash in on early success and expand too quickly. But that can be a huge mistake. Making sure you have all the right ingredients for expansion—including the right team, sufficient funding, and ample demand—is something many small business owners forget to do. Don’t be tempted to make too big of a jump too quickly. Sit down and make sure it’s the right move before making it.
Whether they be due to variable market factors or seasonality, most small businesses experience ups and downs from month to month and year to year. Being able to successfully navigate the lean times and not getting too far ahead of yourself during times of great success is a key trait for a successful small business owner. Maintain consistent service, wages and marketing budget in accordance to your plans. There are different types of unsecured business loans that can help you with this.
Keeping these tips in mind can help you avoid, or at least be better prepared for, some of the most common issues that befall small business owners. An unsecured line of credit for your small business from Kikka Capital can give you the power you need to deal with these issues should they arise. Contact us today to see what option is best for you.