Top mistakes that management of small businesses makes
Small business management is difficult and challenging, and way too many companies lose out on opportunities to develop themselves through managerial mistakes.
While it is perfectly natural for us to make mistakes, here are the biggest culprits when it comes to destroying businesses.
Ignoring Sales and Marketing
This is, perhaps, the most common and biggest of them all. Many start-ups and small companies are solely focused on survival, which results in managers burying themselves with day-to-day tasks and “firefighting”, completely ignoring the bigger picture and strategic development of the business.
Whether it is a lack of resources or desire to control things, managers of small businesses tend to be very reluctant to trust their employees when it comes to more complex tasks. Micromanagement is good in certain situations, but at some point you have to start trusting your employees and delegate responsibilities, in order to grow the business.
Failing to Understand the Financials
In the scenario if the company doesn’t have sufficient cash flow or savings (as is often the case with small companies and start-ups), the funding has to come from borrowing or an investment of funds from either the owner of the business or an outside investor. While you might be very familiar with the aspects of the industry you operate in, many entrepreneurs lack a basic understanding of a profit and loss statement, balance sheet and cash flow analysis. Making big expenditure-related decisions without the proper knowledge of the subject can be absolutely devastating. Make it a priority to get a good understanding of cash flow trends before making any serious steps in that direction.
Lack of Sufficient Planning
There is nothing wrong with growing and developing organically, just the way most small companies do. However, without a robust plan, when the problems and critical situations arise, management and employees are forced to improvise and act fast in order to solve the issue. By creating well-thought-out short, medium and long-term plans, you are minimising risks of unexpected crisis.
Learn from Your Mistakes
To conclude, it is important to remember that everyone makes mistakes once in a while. The only person who doesn’t make them is the person who doesn’t do anything. So don’t beat yourself up the next time you make an error. Becoming a good manager doesn’t happen overnight. Acknowledge it, accept it, and make sure to use it as a learning experience.