Avoid These Common Business Mistakes
As one of the youngest directors of an accounting and business advisory firm in New Zealand, Niran Iswar has an innovative and new-age approach to business. He also has the privilege of being able to watch numerous NZ businesses reach exponential profits daily. He knows what they need to do to succeed, why they fail, and as a result learnt to know how to turn them around before it’s too late. After witnessing a series of commonly repeated business mistakes being made daily, Niran advises that to grow a profitable business, one must avoid these common costly mistakes.
“Reflection is always key in business – what did you do well in 2017? What went wrong? How can you do better? I’m very lucky to be in the front row when it comes to watching some of the best businesses in New Zealand grow to exponential heights and reach their goals. But it’s not all winning moments, I see too many businesses regress due to some common mistakes.
What must one do to avoid those mistakes? Look at matters positively – what must one do to “get it right”. Here are five common mistakes.
Failing to understand cash and the power behind debt
It sounds hard to believe, but countless business owners do not understand the fundamentals of cash or the power behind debt. Yes, a business needs cash, but there is power in leveraging. Don’t have a fear of borrowing. Always keep some of that cash in reserve and get a loan to use it to help you grow faster. Get the things you need now by using someone else’s money rather than all of your own. Your “cash in the bank” adds to your financial strength, often enabling your business to get a loan on more favourable terms. And if you act properly and responsibly with the funds entrusted to you, it will allow you to build up a good credit record.
Concluding bad contracts
Whether it’s a lease on a building, hiring a new employee, extending your business or even selling parts of your business - bad contracts can be the death of business. Not only are they costly to get out of, but they also evoke huge levels of stress around you. The commercial, financial and legal implications of anything but the smallest contracts need careful consideration. Where the commercial and financial consequences of a contract fall within the purview of your field of expertise and experience, use your talents and determine the advantages, disadvantages and risks involved. If they require assistance from someone else such as a lawyer or accountant, don’t hesitate to seek proper advice.
Failing to identify the ideal customer
Very few businesses can successfully open their doors to all customers. If you do not know who you are targeting, then you are punching blind. In a world where there are a million marketing and advertising messages bombarding potential customers, it’s never been more important to define that ideal customer so your business cuts through the clutter. If you offer a service, whether it be professional, corporate or even personal, know the type of customer who will be best for you. A professional service organisation may not be equipped to handle too large a client or be able to offer its services at an effective rate for an individual or very small business. But do not forgot that the small start-up business can often grow. Take the risk based on your assessment of the individual who approaches you. Often you can see that the person before you possess the type of initiative that is likely to make him or her a success.
Not retaining staff
Having a high staff turn over is costly as well as disruptive to your business. Hiring a reputable recruiter who understands your needs well, paired with a thorough on-boarding process ensures staff are engaged and committed. It is for you to set the example. If an employee who is treated properly does not respond, particularly after being encouraged to improve, it is only then that you can consider whether you have the wrong person in your organisation.
Not utilizing the power of networking
Networking and partnering with positive, educated, entrepreneurial minded people can mean the difference between a good business and a great business. There is always opportunity to work together and do more. Here your personal skills, understanding of others and empathy play an important role.