Here are five mistakes to be aware of as your business blooms:
Combining Personal and Business Accounts
The average employee has it pretty easy when it comes to monitoring their finances. With only a personal account to worry about, any of the funds that come their way are, generally speaking, theirs to spend however they please. As an entrepreneur, however, you have to be wary of combining or confusing your personal accounts with those of your business. Apart from the potential confusion this could cause down the line, especially concerning the pay of your employees or the assets of any partners, failure to keep such accounts separate can result in tax audits, legal proceedings, and even seizure of any personal monies, belongings or property.
Spending More Than You’re Making
While this is a problem that typically affects consumers with reckless spending habits, novice entrepreneurs and new startup founders could end up with business expenses that outweigh their revenues before they even realize it. A common problem faced by young companies and startups is that the costs of doing business increase along with the size of your business. For some fast-growing companies, the difference is just too great to overcome.
Forgetting Technology Best Practices
If you’re already accustomed to the world of business, you’re probably already used to the fact that the majority of day-to-day operations and activities are supported through various best practices. The same is true when it comes to your company’s information technology department. For example, most IT professionals would recommend that you maintain 20% more capacity than what you think you will need when storing and archiving your enterprise’s data. Not only does this ensure enough space for the creation of new records and files, but it’s also a great way to accommodate any potential growth in the future.
Ignoring Customer Loyalty
As a new business owner, you cannot stress the importance of customer loyalty enough. There are a number of metrics that can be used to determine the overall loyalty and retention of your customer base, including the use of customer surveys and by analyzing individual sales. An increase in customer retention can also bump up your company’s revenue. However, it can be difficult for a startup enterprise to generate that initial customer interest and loyalty in the first place. The internet is a great place to begin prospecting and marketing to a particular audience, but don’t forget about the traditional means of advertisement. Radio, television and even magazine or newspaper ads can still go a long way in generating buzz and sparking interest.
Making Decisions Based on Emotion
It’s quite common for company owners, particularly those who are new to the game, to make critical business decisions based on their emotions. After all, it’s your pride and joy that’s at risk. Unfortunately, what you want for your business right now might not yield favorable results in the long run. While it may be difficult to achieve, especially at first, eliminating your personal emotions from the decision-making process of your startup is absolutely critical to its ongoing success. Several strategies can be employed by startups to reduce your reliance on emotion when making such decisions. Consulting with others, including partners, board members or even your staff, can work wonders when trying to tackle such choices and overcome challenges.
