After being Australia’s most trusted accountants for the last decade, our team at The A Firm has been able to observe plenty of businesses coming and going.
Unfortunately, many unsuccessful businesses follow the same patterns. Three of these patterns remerge almost constantly.
Are you looking to keep your business healthy and profitable for years to come?
(Of course you are!)
Then don’t make these common three mistakes that cost many businesses a premature liquidation.
Get Overly Attached
Now, don’t get us wrong here: business owners need to truly believe in their product or service to really succeed.
But some business owners (particularly newer ones) can make the mistake of becoming overly attached to their product, blinding them to parts of their business that might not be working.
Some examples are:
- Ignoring Customer Education: If their product is complicated, a business owner may not realize that customers won’t understand it immediately, thus not seeing the value – no matter how good the product is
- Avoiding Bad Numbers: Ignoring declining sales & not taking an objective stance towards it
- Refusal To Listen To Feedback: Unwilling to listen to constructive criticism and implement improvements suggested by experts. Instead preferring to keep their product as they envision it
Sometimes, it is necessary to ignore criticisms and push through bad sales.
But when negative results begin to stack up – and show no signs of improving any time soon – it’s important that you sever your emotional attachment and review your business objectively.
Stick To The Same Old Thing
On the other end of the scale, our fabulous bookkeepers have watched business owners become successful very quickly, simply by doing one thing right.
But then, as the years and months pass by, these same business owners refuse to change from doing the same thing over and over.
It may work – quite well – for a while, but inevitably if you don’t change with the times, your business won’t grow.
This can be as simple as, say, upgrading your business’s operational capacity with new software, equipment or even new staff.
It could also mean pushing out an entirely new product, location or service.
Often, though, it is improving upon your existing product that is the best method for growth.
However, it is the lack of improvement that precedes downfall.
In today’s fast-paced world, what worked five years ago will seldom work today. Customers are barraged with at least twenty different options for any product they need, so you’ll need to make yours stand out by doing something the others don’t.
Otherwise, you might be quickly forgotten.
Ignore Your Finances
One of the biggest reasons that new businesses fail is because the business owner did not put away enough capital to begin with.
Running a business is always more expensive than you think, as is growing one.
Whether it be from believing in their product too much – and thinking it will sell like crazy come day one – or refusing to listen to feedback, these business owners will be woefully unequipped to finance their business during the worst case scenario.
This also goes for established businesses, too: unnecessary expenses (old software no longer used, product wastage, spending lots to woo clients, etc) can quickly add up.
It is not enough to simply earn more so you can spend more. A successful business will need to keep expenses to a minimum and establish an efficient budget to operate on.
If you do not have an established formula for inbound profits (marketing channels, sales teams, referrals) and instead rely upon trends or market spikes, your business may overextend itself to a precarious position. This could come in the form of hiring too many staff when work is good, but paying too much for their salaries when work dies down.
We Can Help
So, who better to help you avoid all three of these catastrophic mistakes than our team of certified accountants who have been overcoming these very problems for over ten years! All of our wonderful clients have come from word of mouth referral, because we put your business first.
Book a free call with us today and our team will take care of all your accounting & bookkeeping needs.