Seven mistakes small businesses make
Running a business is difficult but, arguably, starting one is even more difficult. Most new businesses fail within their first three years of operations and in this post we want to go through a number of mistakes that small businesses do that we believe are crucial to success. Yoba is also a small business and so we´ve put together a list of some of the key pitfalls to avoid by reflecting on our own experience as well as reviewing a number of lists put together by small business associations and companies. This topic is especially pressing today since businesses are under increased pressure as a result of the post-pandemic business environment.
Even if you´re business model is very basic, writing down and reading through your business plan is a good way to spot hidden opportunities. But having a good business plan is also useful if you´re seeking to expand your business as most lenders or investors would want to review the document.
They don’t spend time finding the most suitable financing provider, who understands their business and is there when they need them. A suitable financing provider is not just one that is willing to provide finance but who also understands your business model and industry, and can appropriately use that information to assess your specific risk. Many lenders only offer a one-size-fits-all approach.
Few small businesses have an up-to-date picture of their daily, weekly and monthly numbers and trends. Tracking financial key performance indicators may take a couple of minutes but can really help develop
They avoid planning for taxes, corporate fees and other obligations. A good cash flow forecast can help with this.
They mix private and corporate accounts. Putting in place clear boundaries to separate your private vs professional costs at all times is essential to help you understand the true health of your business and avoid the need for year-end corrections that would otherwise result.
Prioritizing saving for the future (if possible), especially in these turbulent times. If you´re one of the lucky businesses that have seen an increase in revenue during the pandemic, then it makes sense to start preparing for a potential post-COVID business environment and vice-versa.
Monitoring trends. New trends represent opportunities, especially with current wave of ethical production and climate-focus. Some business likely see these as only introducing additional administration and complexity, but could it also represent an opportunity? Monitoring trends allows you to be one step ahead.
At Yoba we want to help businesses manage and avoid many of the pitfalls mentioned above. Our core focus will be on providing access to flexible financing and add additional value by assisting businesses in managing their day to day operations through usage of technology. In doing so, we hope to help businesses thrive!