If you’re looking to grow your venture, you’ve probably come across a lot of advice about what you should do.
But what if we told you there’s a lot more to growing your business than just doing the right things?
It’s easy to fall into common traps that can hold you back from your full potential. These pitfalls are often difficult to see because they’re part of the status quo.
Let’s break down these common mistakes and figure out how to avoid them in our quest for business growth.
1. Not Managing Cash Flow Well
So you’ve probably heard this already — according to a U.S. Bank study, 82% of businesses fail because of poor cash flow management.
Therefore, cash flow is one of the biggest challenges for businesses, especially when they’re just starting out.
You need enough cash on hand to cover expenses (including payroll) and pay suppliers, but not so much that you’re tempted to spend it all at once on unnecessary expenses (we’re looking at you, new office furniture).
It’s also important to have reserves set aside for when times get tough — such as during a slow season or when unexpected costs come up. So that you don’t have to take out a loan just because your business ran out of funds unexpectedly.
We highly recommend this article: 7 Tips to Manage Cash Flow to Grow Your Small Business
2. Not Having a Growth Plan
Many entrepreneurs start their businesses without a plan. They think that it’s just going to happen, and they don’t need to do anything about it.
They don’t realize that there are many steps involved in the process of growing a business, and if you don’t take those steps, you won’t grow as fast as possible.
Growth plans are essential for businesses because they help you prioritize and organize your efforts to achieve growth goals. Without one, it’s easy to get lost in day-to-day tasks and lose sight of the bigger picture.
Good growth plans should include specific milestones & KPIs, performance metrics, and action items for each milestone. They should also include budgeting projections so you can see how much money will be required to achieve each milestone and whether or not you need outside funding to reach them.
3. Not Diversifying Your Income Streams
If all your income comes from one source, there’s nothing protecting you if that source dries up or becomes less profitable than it once was.
A good rule of thumb is to have three streams of income — one stable source, one growing source, and one experimental source that may or may not pan out as expected.
So that if one dries up temporarily due to economic conditions or competition, the others will still be bringing in revenue while you work on building back the first stream of income again.
4. Not Having a Defined Sales Process
There are three types of sales processes: consultative, transactional, and solution selling. Each has its own benefits and drawbacks.
Transactional selling is good for new customers who need to quickly get up to speed with your product, but it’s not effective when working with larger accounts or those that have complex needs.
Solution selling is best suited for large enterprise accounts that require more customization or handholding throughout the sales cycle.
Consulting requires more time upfront in order to establish trust with prospects, but it can lead to long-term relationships and better long-term results for both parties.
The most important thing is that whatever process you choose must be clearly defined so everyone involved knows exactly what their role is at each stage in the process — especially if they’re working remotely or across multiple time zones.
Moreover, the only way to ensure success is by having a tried-and-true process in place with specific steps that lead customers through the buying cycle from beginning to end.
5. Spending Too Much on Marketing
This is one of the most common mistakes people make when starting their own business. Too many people spend money on marketing before they’ve even had a chance to see if their product is good enough to sell.
They then spend more money trying new marketing methods without any real data on which ones work best.
Instead, they should focus first on creating an amazing product or service and getting it out into the world through social media and word-of-mouth marketing.
Once they’ve done that, they should be able to measure how effective their efforts were and use this information to determine what type of marketing works best for their business model before investing more time or money into it.
6. Not Setting Goals or Tracking Progress Towards Them
It’s tempting to think that if you just keep doing what you’re doing, things will take care of themselves.
In reality, though, if your business isn’t growing, you won’t survive long enough to enjoy the fruits of your labor.
This is why it’s so important to set goals and track your progress towards them at regular intervals.
If you don’t have specific goals in mind for your business, it can be difficult to see which direction it needs to go — not to mention how far away those goals are from being reached!
7. Hiring Too Fast, Not Being Selective Enough, or Hiring the Wrong Way
Don’t hire too fast — If you’re growing quickly, it’s tempting to hire on a whim — especially when you see an opening on your team and think, “Oh, I need someone to do that.” But if you aren’t careful, you can end up with a weak link or two that slows down the rest of your team.
Don’t hire too slow — On the flip side, if you take too long to fill open positions, it can have the same effect as hiring too fast — slowing down your entire organization. This is especially true if there are critical roles that need filling right away.
Don’t hire for skill and experience over attitude and fit (unless it’s really important) — It’s easy to fall into the trap of hiring people based solely on their resume or their skill set because it feels safer than hiring based on personality and culture fit. But it’s not safe at all — because if they don’t fit in with the company culture, they’re likely to leave quickly anyway!