Stage III: Mistakes that could hold your company back from growth
1. Overextending your geographic reach. In the search for new customers and new markets, it is easy to cast your eyes far and wide. After all, if you can find hundreds of customers in your hometown, you should be able to find thousands in the many hometowns across the country.
But travel costs money. Flights. Hotels. Rental cars. Meals. It can all add up very quickly. This gets further complicated by the fact that you will be battling uphill when working outside your community, whether it’s unfamiliarity with the location, battling against local competition, or other challenges. You simply won’t have the support or the network you need in these other locations.
A wide-ranging customer base can also create demand for emergency travel, which can be expensive. This commitment to existing customers will go on, regardless of whether you can afford to support it every time.
Instead, consider first focusing your efforts close to home, and grow geographically in a scalable fashion. When that reach is necessary, make sure you have partners and technology solutions in place ahead of time to minimize the amount of costly travel required.
2. Not reading (or understanding) terms of credit agreements. Business loans can provide the necessary liquidity to balance out seasonal cash flow or the funds can be used to help your company grow. If you think a loan would benefit your company, be sure that you understand what you’re committing to in terms of payments, collateral, and interest. Businesses should set a goal to optimize their credit position. Carefully read and understand all credit agreements before accepting funds. This includes credit card agreements, with their related interest and fees, lines of credit issued by banks, and other commercial loans.
In today’s market, many financial products are available for small businesses, from crowdfunding to venture capital and small-business loans. Taking the time to compare the financial ramifications of the different types of loans available can potentially yield large savings in interest and fees. Also, from an accounting perspective, small businesses need to stay in compliance with credit agreements, and should record all required information properly in their financials.
3. Getting it wrong on social media. Establishing your brand’s digital platform and an online presence is vital for long-term success. You may want to include a social media strategy in your marketing plan, based on market research identifying sites frequented by your prospective customers. This way, you can diversify your social media activity to cover a broad span of platforms. Additionally, it’s important to do your due diligence and understand any disclaimers and disclosures required by prevailing federal and state privacy marketing regulations as you prepare your social media strategy.
Tracking performance is essential to avoid wasted time and money spent on ineffective marketing campaigns. Most social media platforms come with built-in analytics and tracking tools to assess the effectiveness of your tweets, blog posts, ads, and so on. You can also employ promo codes, unique URLs, online customer survey tools, and customer relationship marketing platforms to precisely quantify the results of your social media strategy.
4. Failing to measure the right information. If you’re not measuring company performance, you can’t grasp the success or shortcomings of your overall business strategy (and if you measure the wrong information, you risk staying in the dark). For example, you don’t want to invest in a new growth opportunity without fully analyzing the potential profits. Don’t assume that the status quo will carry you into the future. You should always be looking at ways to improve, and planning for changes to help your company thrive.
Businesses fail every day, but many times it has nothing to do with whether they provide quality products and services. Instead, it could be due to mismanaged budgets, making inflexible cash commitments, and finding themselves without the capital they need to continue operations.
To succeed, you must be strategic with your time and your small-business budget. Both need to be invested wisely, and concentrated on efforts to drive revenues and growth. Working with a trusted third-party provider in areas such as payroll can free up your time to focus on running your business and help you avoid potential business mistakes and common pitfalls.
Article written and published by Paychex, Ameris Bank’s partner for simple, virtual, cost-effective payroll and HR solutions.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.