Every small business goes through financial ups and downs. This is especially true in the early days of a business, when owners are yet to figure out, or establish, their business’ rhythm. There are some universally common mistakes that we see small business owners make. We’ve summarised the three most common small business mistakes here, to help you avoid making them yourself!
1. Failing to budget and forecast
It may surprise you (or not!) that very few small businesses work to a budget or monitor cash flow. That’s probably because it’s not exactly the sexiest of tasks, but it is important, and in some instances, critical to your success. Failing to think ahead in this space has seen countless small businesses run out of funds and close their doors. Create a robust month-by-month budget which breaks down all incoming and outgoing funds. You can create one yourself, or download our Free Cashflow Plan.
2. Not getting an Accountant on board early
The cost of hiring a great accountant will pay dividends. Their business is to see you make the most of your money and take advantage of the various tax benefits available to your small business. Invest time in finding the right accountant with whom you can develop a long-term professional partnership that will keep your business on track to meet its goals.
3. Driving down costs rather than driving up revenue
Of course it’s important to continuously assess your business costs, and cut anything that is redundant or unnecessary. However, when considering how to improve profitability, many business owners make the mistake of focussing on cost-cutting. This is an unsustainable approach, because in order to make money, you need to spend it. Focus on the areas of your business of highest return and consider – can you expand this aspect of your business; can you introduce new or complimentary products or services; what new platforms or technologies are available to keep existing customers coming back and introduce you to new customers?
If you’ve identified an opportunity for growth, or need additional working capital to help with cash flow or purchase a new asset, a small business loan may be the best option. If you’re looking for a flexible, affordable loan that doesn’t need to be secured against existing assets, Boss Finance can help. Apply online now, it only takes a few minutes and you could receive funding in as fast as one business day.