The 5 deadly business sins and how to avoid them
Janet Jack, finance director at the FSB, discusses the common pitfalls small business owners make
I understand the daily pressures starting and running a business brings, so here are some of the pitfalls you should do your best to avoid.
1. Not keeping paperwork in check
This is a legal requirement and HM Revenue and Customs (HMRC) overtly states: “You must keep records of all your business transactions” adding; “If you do not keep adequate records or you do not keep your records for the required period of time, you may have to pay a penalty.”
Without the right paperwork in order, HMRC can and will challenge you.
2. Not understanding your audience
The people who buy from you are one of the most important aspects of your business, without them you wouldn’t really have a business. Know as much about them as possible. What do they do? How old are they? What communication channels do they use? How much do they earn? What do they eat for breakfast?
You need to know what they want, how they engage with you and how to reach out to them.
3. A fear of failure
Learning to deal with risk and overcoming your fear of failure will be one of your greatest lessons. Changing your concept of failure and being more solutions focused will fuel positivity. Failure is an opportunity to learn what went wrong, and ensure you don’t make the same error twice.
Starting a business is one of the most fulfilling experiences of your life, so don’t let the fear of failure hold you back.
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4. Not researching your market
When entering a new market you need to be aware of your competitors. Failing to acknowledge them is foolish and will no doubt be a costly error. Naturally there will be well-established businesses so you need to find inventive and creative ways to grab their customers’ attention. Firstly, position yourself as a credible alternative and lure their loyalty by building trust as a basis for a long-term relationship. Secondly, communicate unique selling points to attract people away from the competition and provide a superior service to encourage repeat custom.
5. Failing to plan
Not having a plan is like having a car with no wheels, you won’t be going anywhere fast.
A business plan is required to map out your long term success and ensure you outline specific actions that need to take place to improve your business objectives and overarching goals. Business plans also allow you to keep on track of your finances. According to research by finance software provider, Exact, 70% of companies with a plan turned a profit, compared to 52% of businesses without a plan.
So, what are you waiting for?
The FSB team is here to offer advice and talk through how we can help you avoid business sins.
For more information visit www.fsb.org.uk/join or call 0808 16 88 512 to chat with one of our team quoting SGB10.