Business success (or failure) isn’t all about luck. Often it comes down to either making good decisions or bad ones. No business is ever going to be mistake-free but obviously, the more you can avoid mistakes or poor decisions, the far greater chance your business will have of being successful over the long term.
With this in mind, let’s look at some typical mistakes to try and avoid when running a business or company.
#1 – Failing To Create a Business Plan
Business plans can be anywhere from very simple and basic to complex. It really depends on the type of business you want to open and how meticulous you want to get with the planning stage. One thing is for sure though, having some form of business plan is always going to be better than having no plan at all.
If you’re not sure how to go about writing up a business plan, there are loads of examples and templates you can find for free online to help guide you.
#2 – Not Having Enough Startup Capital
One of the most common reasons new and relatively new businesses fail is a lack of startup capital. The enterprise basically runs out of funds before it really has a chance to get off the ground and up and running.
Some businesses don’t require a lot of startup capital while others will need a lot of funding to get things going.
Before starting a business, much thought needs to be put into how much money you will need, really need, to get the business started and to keep you afloat for some time until you have a chance to become profitable.
#3 – Over-Spending
Another financial problem many businesses face is that of over-spending. This could be over-spending during the startup phase or during regular business operations. Either way, spending unnecessarily and spending too much could ultimately prove to be the downfall of your business.
Sometimes, it’s not readily apparent that over-spending is taking place. That’s why it’s wise to regularly go over the accounts and determine exactly where money is being spent, how much is being spent and whether too much money is disappearing in outgoings.
If your business is guilty of over-spending, once you understand where all the money is going, you can make some spending cutbacks and plug some spending leaks.
#4 – Failure To Be Compliant With the Law
Every business in the UK is governed by a variety of rules and regulations that business owners and their employees must abide by. It’s the responsibility of business owners, or their compliance managers, to be fully aware of what the laws are or being compliant and remaining compliant will prove impossible.
A fantastic tool that can really help with compliance is regulatory compliance management software. Sophisticated dashboards and the ability to connect to essential libraries means the software is both easy to use and will help keep your business compliant at all times. Any workplace incidents are also easily reported using the software.
#5 – Not Monitoring the Progress Of Your Business
One common mistake some bosses make is to not monitor the progress of the business. If you don’t keep tabs on how things are progressing or have a clear direction for where the business is going, you won’t be able to make any necessary adjustments to keep things on course. It’s a very rare business indeed that won’t require some adjustments and course changes along the journey.
#6 – Failing To Manage Risk
Risk management is a vital part of running a successful business. What you want to try and do is avoid as many problems and pitfalls as you can. This requires forethought and diligence, which is primarily what good risk management is all about.
You’ll want to list any potential or foreseeable problems you can think of and put counteractive measures in place to prevent those issues from ever occurring. The more problems you can avoid, the more successful your business will be.
The Takeaway
This article has only listed six common mistakes people make in business. Spend some time researching business mistakes and you’ll be able to make much better business decisions going forward.