Running a startup or small business? Avoid these 4 mistakes growing businesses often make

Running a startup or small business? Avoid these 4 mistakes growing businesses often make

Experiencing a growth phase in your business is an exciting time. You’ve worked hard for it and the countless hours have paid off. However, growth is not without its challenges. We’ve compiled 4 of the key mistakes businesses often make, to help you avoid them.

Doing it alone

While you likely needed to be a jack of all trades during the early stages of your business, this should not be the norm. Once your business has sufficient cash flow, identify tasks that drain your time or that you are not fully skilled in and hire specialists to take care of them. This will free you up to continually keep your pulse on the overall health of the business and identify and foster growth opportunities.

Tip: Optimizing your workflows through automation is a quick way to save both time and money. We help owner managed entities and SME’s conduct this analysis and setup the relevant processes.

Hiring the wrong people

“Your people are your biggest asset.” We’ve all heard that saying before, but it’s flawed. The right people are your biggest asset. Small businesses often begin with 2 or 3 people, fuelled by the same vision and passion, working 18 hour work days. Hiring 2 more employees that are the wrong fit would constitute roughly 50 percent of your people. Business research shows focusing on these 3 things helps your hire the right people.

  1. Skillset – the skills and experience a person has built up. Remember, these can be learnt on the job.
  2. Cultural fit – do the person’s values and personality fit the culture of your business?
  3. Networking fit – will the person thrive given the processes and ways of work of your business and its employees?

Not being frugal in growth

While turnover and liquidity may be increasing, it’s important not to lose your frugal approach that helped the business succeed in the past. Use the additional funds to create a buffer should your business experience challenges or as capital to seize opportunities. Identify key areas that you can cut costs and ask yourself, “is this expense really necessary to deliver on clients’ needs or for the success of my business?”

Tip: Ensure you have your finger on the pulse of your business’s finances – this helps you know where money is going and what resources you have at your disposal. We offer financial management services, giving you peace of mind and ensuring you get the most out of your money.

Not knowing who your ideal customer is

As your business grows you are likely to be presented with new opportunities and client needs. Simon Sinek suggests that all businesses should regularly remind themselves of their “why?”. If serving a particular client’s need does not meet the reason why your business exists it will likely detract you from your purpose, leading to growth that does not fall part of your strategic plan. This type of growth is usually not as profitable and can drain resources from your core business. Successful businesses ensure they maintain their focus during growth.