Every successful business comes from a great idea. This idea can be purpose-driven, vision-driven, or both. Bringing it to life in the earliest years of your business can be overwhelming. We’re not all natural-born leaders, mathematicians, business analysts, and at the same time, we’re not expected to be.
But that lack of expertise in every single business management category means mistakes are bound to happen. And if you’re not prepared to deal with those mistakes, it can quickly derail your business idea. So, if you’ve got a great business idea and are determined to bring it to life, then this article is here to help you avoid the 7 most common business management mistakes.
1. Failing to track everything
From day one of building your business, you’re going to be experimenting, creating data and processes, and learning. It’s so crucial that you keep track of everything. Even those things that you don’t deem as vital for your business to flourish.
It’s hard to predict how quickly your business will grow. Even if you have a business growth plan, it doesn’t mean that your growth will stick to it. Perhaps you’ll boom, win funding, and need to recruit hundreds of people at a time; maybe you won’t. What’s certain is, new staff will come, and old staff will go, and if you’ve not documented the past, you’ll struggle to onboard and manage knowledge for future employees.
Process documentation is essential for enabling your business to scale. It will save your hiring managers time, and it will allow future talent to learn from past mistakes. Document everything; even if you don’t see it as necessary, there’s no doubt someone can learn from it in the future. Your documentation will help measure success and set benchmarks for future KPIs.
2. Breaking data compliance regulations
One thing that you need to have down from day one of managing a business is your data compliance. Yes, we know it’s not the most thrilling of things. However, if you’re not handling consumer data correctly or legally, you could risk coming under fire and facing huge repercussions.
Take the California consumer privacy act, for example. It’s a relatively new privacy law to protect consumers’ personal information. It affects any business operating in California, or even with customers from California — which could be yours, depending on where you’re marketing.
The act protects every piece of consumer data a business may keep, helping them to sell better. Unintentional non-compliance to this particular act can result in a fine of $2,500 per violation and up to $7,500 per violation deemed intentional. Either way, these fines are something any new business can do without–especially in its earliest years.
It’s not only financial damage you can do here. A privacy scandal can also tarnish your reputation and stunt your business growth and sentiment.
3. Conducting insufficient research
Research is key — it always will be. Whether you’re doing it with your business data or you’re using public resources. It’s so important before you make a business management decision or change.
Leaders and ideas people tend to act on feelings. We tend to be very emotionally driven and impulsive. That’s not necessarily a bad thing. However, when handling a business and potentially great deals of money, we need to be more data-minded and back our decisions up with research.
Use research across every area of your business. Whether you’re researching customer satisfaction, like UX research, or a competitor analysis, or are looking at more internal subjects like internal processes best practices or company structure research, you can take safer steps by doing your research first. You’ll minimize room for error and justify decisions based on data.
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4. Not focussing on branding
No matter your business niche, product, or service. Know that you’re not just building a company. You’re building a brand. 81% of customers say they need to be able to trust a brand to buy from them.
Every public action you take builds your reputation and your online brand affinity; this also means it can jeopardize it. Ensure that you focus on building a brand and business that people can relate to, understand, and look forward to engaging with.
Branding does not stop at building a customer base, though. It can also help you attract and retain top talent. 50% of candidates won’t work for a company with a bad reputation — even if it meant missing out on a bigger paycheck.
Employer branding can drastically help your business to win the talent you need in this massively competitive market. With the 2020’s jump into remote work, it means talent can pick from more employers than ever before and are no longer limited to the businesses in their immediate travel radius.
This remote work reality means employees are making decisions to work for employers they like rather than those who only pay well. LinkedIn research shows 75% of candidates will research a company’s reputation before applying for a role — time to build a brand that gives them great results.
5. Failing to be remote ready
Building on point number four, every business needs to be ready and able to function remotely. Those businesses that only ever operated in static offices really struggled in 2020 and many didn’t live through the transition.
How can you avoid making the same mistakes? Invest in communication tools and strategies to ensure all of your business communication is online, and your employees are used to speaking using these digital channels.
However, it’s much more than tools to ensure your business is set up for success in the remote work world. Try to look at ways you can build a company culture remotely and take a look at this home-based business checklist to ensure you don’t miss anything else.
6. Forgetting finances
Numbers, to some, are an entirely different language. They can be daunting, and managing finances is certainly not something that comes easy to everyone. New businesses need to take care of everything they spend. The good news is that there are plenty of financial resources and specialists out there to help you get a hold of things from day one.
Don’t make the same mistake many new businesses do and put finances on the back burner because of a passionate idea. Driving a business with a mission is excellent. Still, you need to be able to support your mission along the way. Whether that comes through investment, personal finances, or another means, make sure you’ve got your financials looked after.
Ensure the taxman doesn’t come knocking, and your business is set up for financial success as well as prepared for crisis.
7. Disregarding the importance of customer service
Lastly, but certainly not least is customer service. 84% of consumers say customer service is a crucial factor helping them to decide whether to buy from a company or not.
The age-old saying of “the customer is always right” should be leading your customer service strategy, no matter your business niche. Even today, with all the forms of paid advertising available, the strongest form and highest conversion marketing tactic is still word-of-mouth — 86% of customers trust word-of-mouth reviews and recommendations.
So, how do you win peer-to-peer referrals organically and authentically? You focus on honest and rapid customer service. Even if your product is flawed or faulty, or your business makes mistakes, with humble customer service comes forgiveness.
You’ll be able to turn mistakes into opportunities, build loyal brand ambassadors, and win the hearts of your customers as well as their heads by simply handling situations with transparency. People forgive when we own up to our mistakes.
At the same time, excellent customer service can help to build higher customer success rates and, in turn, win product referrals from your customer’s micro-communities. You could be a handshake away from your biggest client, but you’ll never know if you don’t treat your current ones well.
Focus on customer service from day one and every day after you’ll be thankful for it.
Wrapping it all up
These seven business mistakes may seem daunting, but there’s a lot you can do to avoid them. Undoubtedly, you’ll make mistakes on your road to success—we’re only human and are bound to encounter problems that we don’t overcome on our first attempt. What’s important is that we learn from our mistakes, and we document them for others to learn from in the future.
Remember, whenever you are in times of doubt or come across business management problems that you’re struggling to conquer, come back to why you started your business in the first place.
You started because you saw a problem or injustice in the world that you can overcome. Or you began with a vision of creating a better world with your product or service. Remind yourself of your business purpose, mission, and vision. Stay true to it. Keep striving towards it. Whether you make one mistake along the way or many, what’s important is you keep moving forward.