Published on November 29th, 2012 | by Lena Martin1
Big Mistakes that Could Sink Your Business
They say that a chain is only as strong as its weakest link, and when you relate this to business, there are many different ways you can interpret this cliché. For instance, you could use it to refer to your employees and co-workers, the laziest and the most unskilled of whom can bring the entire team’s morale and productivity down. Alternatively, you could also use this quote to refer to how the failure of a single piece of equipment can bring chaos to the schedule of entire production lines. For the purpose of this article, though, let us work under the idea that a single mistake can lead to a chain reaction which would eventually lead to the doom of your business. Here are a few examples.
Image from: BusinessInsider.com
Massive changes, poor timing. There is nothing wrong with a start-up that fearlessly makes bold changes that will completely redefine customer experience and even change the very nature of the business. However, with big decisions like this, timing is always the most crucial thing and can spell the difference between a strategy that clicks and one that simply falls apart at the seams. Ideally, change should be a gradual thing and not just sprung up on unsuspecting customers. You have to let people get used to the idea first before eventually testing it out. For obvious reasons, making big changes in short periods, no matter how fresh and revolutionary the idea, can scare off customers so tread carefully.
Tips: Do a trial run. Have a back-up plan. Whatever you do, do not ever let yourself get cornered into a last resort where one strategy can make or break your business. If for some reason, you can’t do this, plan carefully and be quick to react to important developments. Here is an example of how Verizon messed up introducing a big adjustment.
Growing too fast. By “growing” here, we mean how many employees you employ to perform certain tasks and roles within the business. Efficiency is always a concern, especially for a budding start-up because you want to get the most out of your money and time without losing out in the process. In some cases, businesses tend to expand and take on more employees too quickly that it would soon come to a point where the extra manpower, rather than produce better and more outputs, would actually impede progress to a great degree.
Tips: Learn all about scaling. Understand your business to a point that you know the optimum number of people to hire, because it is definitely different depending on the field. If you don’t have money to spend hiring people, then you shouldn’t be hiring, but if you do you should think long and hard about how to use that money properly and without waste.
Selling to a biased audience. For a start-up, two of the most important things are feedback as well as revenue. One is to keep the business going, and the other is to keep the business improving. However, if you are going to limit yourself to selling to a select population such as family, friends, and close relations, then the negative aspect is two-fold. The first is that the people who are buying from you could only be doing so because of an emotional obligation. The second is that any feedback you get from them would not reflect the sentiments of genuine buyers. When you make this mistake it is not impossible to find yourself really struggling a few months along.
Tips: Go to where the real demand is. Learn how to distinguish between a transaction made out of genuine need and a transaction made out of love or politeness. All revenue is useful to a business, but you should nevertheless take the time to single out those that would really last. My suggestion is to whip those posters and flyers out and try to appeal to the people who have a real need for your services.
Image from: GraphicDesignBlender.com
There are already so many businesses that have shown so much promise and come so far, only for a single blunder to completely derail their progress. It’s a shame because a lot of these tragic failures could have been avoided, if only the people in charge were aware of a few simple tips. Hopefully, the tips listed above would help you stay away from business failure and continue on to be a smashing success.