Growing your business
5 Common Mistakes SMEs Make
According to the National Federation of Self Employed & Small Businesses Limited, small businesses accounted for 99.3% of all private sector businesses at the start of 2018 and 99.9% were small or medium-sized (SMEs). That’s a pretty big percentage, and one that shows no signs of decreasing significantly anytime soon.
With such a substantial number of small businesses popping up throughout the UK, it’s highly likely that some of these will be first-time business owners. These budding entrepreneurs are ambitious and driven, especially when putting themselves into what is such a competitive and crowded sector of UK industry. This can be a pressure-filled situation to thrust yourself into and one that can be wracked with mistakes along the way. Whether in pricing, planning, people or production, here are five of the most common mistakes made by SMEs.
Many SMEs tend to charge less in order to sell more of their goods and services. This is a great way to propel your business into the zeitgeist - supplying cheap goods to serve a full-range of customer requirements and to not exclude those who may struggle to satiate the recommended price. Yet, this can also be a slippery slope into an imbalanced cash-flow – a dangerous prospect for all developing businesses. The term “busy fool” is thrown around for those who prefer customer footfall over product profit. Remember, a strong cash balance makes it possible to invest and grow. So, maybe keep your cheap prices for certain events or customer loyalty. That way you maintain customer satisfaction while not undercharging your goods indefinitely.
Teamwork Makes the Dreamwork
This is rather self-explanatory but a great team makes all the difference when ramping up a budding SME. Hiring too quickly is not only an expensive endeavour but a sure-fire route to failure as it’ll start your business off on the wrong foot. Not to mention that it could also lead to a quick turnaround – a prospect that is detrimental to both profitability and business morale. So, think long and carefully about who you hire. Teams work best when everyone in said team works well together.
No Website, No Spotlight
One of the biggest mistakes an SME can make in such a largely competitive market is to not have an online presence. Maintaining a website and propelling your company’s sphere of influence by way of social media is a sure-fire way to get your business booming, especially considering the volume of small businesses popping up throughout the UK. Use these online tools to gain a foothold in this ever-expanding sector of UK business or risk remaining under the limelight and out of the spotlight.
Research, Research, Research
It’s back to school for those wishing to start up an independent business, as diving headfirst into any industry level endeavour requires strategy, bravery, and a good level of market research. Yes, a perfunctory survey between family and friends might give you a semblance of knowledge as to the state of your industry and customer needs but it’s nothing compared to a large-scale study of the same concern. Every start up requires a well-defined target audience, otherwise it’ll struggle to compete. Hold focus groups, interview business owners, gather data on trends. Do everything you can to help support your SME, or risk slipping under the radar.
And finally, a standard mistake made by many an SME when starting up is not assembling enough finance to fund your endeavour. Businesses cost money! They don’t just make it. And gathering finance can be as time consuming as it is costly. So, don’t faff about when considering finance options. Stay on top of your cash-flow by enlisting the best in finance funding and be ready to foresee potential cash crunches well in advance. Don’t sleep on this one, as applying late may result in a less-than-ideal option.
Liberis Finance offers a wonderful Business Cash Advance that can sustainably fund your plans all year round. Making your mistakes our priority.