Five Big Mistakes that Could Ruin Your Small Business and How to Avoid Them

Many small businesses are stuck in limbo. Sales are sluggish or stagnant, and many small business owners have worn themselves out trying to be all things to their businesses. There are five big mistakes that small businesses often make that hamper growth and hinder business success. But, by taking some time to develop your small business, you can avoid these common mistakes. Even if you have made some of them, you can rebound and get your business back on track.

  1. Focusing on getting the big customer. According author Rhonda Abrams who penned the book “The Successful Business Plan: Secrets & Strategies”, small businesses focus on getting that one big client instead of many little ones. But, what happens if you don’t get the big customer? Are you taking care of your smaller ones? They can make or break your business. It could be worse if your neglected smaller customers left you than if the one big customer left. Together, your small clients pack a powerful punch.
  2. Not diversifying products and services. Today’s customers look for products and services that offer them more value – both in the wallet and in the product or service offered. If you don’t diversify, your competitors will. They will entice your customers away with sweet deals and aggressive sales. Consider repackaging products and offering incentives like coupons and discounts. Bundle services to create a more comprehensive, packaged service offering.
  3. Poor pricing models. Your pricing must be competitive with the market you are serving. Price your products and services too low and customers won’t buy because the perceived value is low. Price them too high and you could knock yourself out of the market.
  4. Not creating a unique selling proposition. Web accessibility has fueled a shop around mentality in consumers. Every competitor out there is touting service and price. And, that’s okay. But, you can’t jump in there with the same thing. You’ve got to give prospective customers a compelling reason to choose your products or services over the competition’s.
  5. Trying to go it alone. Big businesses aren’t created from one person handling everything in the business. They are created by partnering, hiring and relying on the expertise of others. You can’t be successful trying to be all things to your business. There is just too much to do and not enough time for one person to do it. Get help by adding staff or outsourcing.

So how do you overcome these obstacles to your businesses success or fix mistakes you’ve made? Take stock in your business and focus on business development.

Business development is not just for large businesses. Small business owners can benefit from business development, too. Whether your business issue is ineffective pricing, inefficient processes or poor marketing strategy, business development can put your business on the fast track to success by helping you get organized, fill your pipeline with customers, increase profits and avoid or rebound from mistakes.

Every decision about your business rests squarely on your shoulders. One wrong move could put you out of business. Are you willing to make the move necessary to make yours succeed? Have you considered hiring a business development consultant? To learn more about business development, contact GM Consulting, http://www.gmglobalconsulting.com, and request our free white paper, “Position Your Business for Success with Sound Business Development”.

Do’s and Dont’s when Selling Your Business

DO’S

1. Focus on running your business! Many business owners sell because they are burnt out. Therefore many essentially stop working and wait for a buyer to come along. This can really hurt your chances of selling your business. Remember, the selling process can take 6-18 months. Keep doing what made your business great.

2. Keep advertising. When selling, many business owners cut their expenses. You want to try to maximize profits during this time but advertising is not an area to cut back on. Buyers do not like to see that you eliminated all advertising when you listed the business – it casts doubt on whether or not the sales will remain at their current levels.

3. Keep your inventory stocked. Many business owners whittle their inventory down to nothing. Generally, inventory is negotiated and sold, in addition to the business. There will be time, after the business is sold, to agree on a price for your inventory and, if necessary, sell it down. You need to keep the business operating normally.

4. Focus on sales. The best time to sell is when you are having your best year ever.

5. Keep an open mind about who, how and why someone will buy your business. Buyers buy businesses for a variety of reasons. Try to keep an open mind about the deal structure. Often times being creative can make deals happen.

6. Deal with any problems. Employee, customer and vendor disputes should be dealt with before a buyer is in the picture. You do not want a viable buyer to back out because of a unresolved problem that reared it’ s head during the due diligence period.

7. Pay your taxes. This applies even if you have an extension. Buyers need financing. Lenders, many times, will need to see the last year’s tax returns before they can lend. You cannot sell your business until the buyer gets financing.

8. Pay your bills. You want your vendors happy so they want to do business with the new owner.

9. Educate yourself. I have devoted a good deal of time to my website. Use this resource and others to learn about the process of selling a business.

10. Work with a professional business intermediary. Selling a business is different then selling real estate or investments or the practice of law. Selling businesses is our business. It is a full time job and can be challenging. You and your business deserves a professional who has taken the time to learn this profession and the experience of past transactions.

11. Talk with your tax advisor about the tax implications of the sale of your business.

DONT’S

1. Do not commit your business to any long term obligations. This certainly applies to leases. This will make the transaction more complicated than it needs to be. A new owner may have a different vision of where he or she wants to take the business.

2. Do not invest in any new equipment. The only reason to buy a new piece of equipment, when you are selling, is if it is mandated by law or you will go out of business without it. If you buy a new item, especially an expensive one, it is highly unlikely that you will recoup your investment when your business sells.

3. Do not switch any services. If it is not broken do not fix it applies when you are selling your business.

4. Do not tell anyone that you are selling. As I have mentioned before, on http://www.california-business-broker.com, generally, it is best to keep the sale of your business quiet. There will be ample time to tell your employees, customers, vendors, landlords, etc when the deal is done.

5. Do not hide anything. It will be discovered eventually. Surprises are a big reason deals fall apart.

6. Do not cut hours, employees or production. Try to have your best year ever.

7. Do not wait too long to sell. Many business owners put off selling their business. Timing when to sell your business is difficult. If you are feeling that your business “owns” you then it may be a good time to consider selling. Remember, on average it take 6-18 months to sell a privately owned small or medium sized business. It is not a fast process. Additionally, the price a buyer is willing to pay is based, mainly, on your business’s earnings. If you are burnt out and allow sales and profits to decrease – it could be more costly to wait than to sell now.

3 Simple Ways To Start Your Own Business

Get Ready. Get Set.

You’re ready to start your own business, but you are really clueless as to which business would be really right for you.

It’s really about focusing on wrapping your passion and expertise into a product or service that will make a clustered niche of people go absolutely crazy.

Option One

* Create A Business Based On What You Already Know How To Do.

There are hundreds of new businesses that start each day based on someone taking what they already know how to do and creating a new business from it.

Most often these businesses are started to assist people in doing something that they either don’t know how to do, or would prefer not to do.

The bottom-line: You must identify a targeted niche that values what you bring to the table enough to pay you for it.

Review The Key To Finding Work-At-Home Business, Jobs or Ideas. It highlights that the best way to start a business based on what you already know is to find a need and then fill it.

Option Two

* Find a Direct Sales Opportunity That Piques Your Passion

Believe it or not, direct sales is one of the quickest, cheapest and easiest ways to start your own business.

According to the Direct Selling Association – THE leading authority on Direct Sales – the direct selling industry is booming.

New direct sales opportunities are new, hot and fresh — these are not your mama’s direct sales companies of yesteryear.

If the Direct Sales is your route, figure out how you will need your business to work before signing on the dotted line:

– How you will introduce your product or service to customers? – How will generate enough interest to keep customers coming back?

- What will you do to ensure that you work the business strategically enough to make a profit?

- Also, look closely at the price structure, start-up fees, and the monthly amount of sales required to stay active in your direct sales company of choice.

The bottom-line: Make sure you choose the opportunity that will enable you to attract customers and build a business that will be an ensured success.

Review Attracting Customers 101 – Make Your Business Known By Marketing A Solution That Lifts Their Burden to get a glimpse of what it takes to create a business that customers will find irresistible.

Option Three

* Work It Backwards By Starting A Business That Centers Around A Complaint That You’ve Been Hearing A Lot Lately.

A lot of business opportunities present themselves when you hear someone saying, “I wish someone would do something about X” or “Boy, I wish I could find a business that would Y”.

The key is to assess whether the complaint you hear will deliver a successful and sustainable business.

Thus, you will need to figure out if your business will generate enough customer interest and whether you can design a product or service to realistically solve that particular complaint.

The bottom-line: Great entrepreneurs understand that some of the greatest businesses are born from sheer need.

Giving an ear to complaints will give you front-row assess to many overlooked business ideas.

3 Simple Ways To Start Your Own Business – Making It Work

Regardless which of the 3 simple-ways-to-start-your-own-business you choose, you will need to make sure that it fits within your passion, expertise and into the context of your life.

Time To Make One Of These 3 Simple Ways To Start Your Own Business Work For You!

Signed: Latarsha Lytle, MBA small business strategy adviser, motivational speaker and coach.