8 Big Mistakes For Your Business

8 big business mistakes

Posted on April 11, 2014 in Accounting, Blog, CRM, Expense, Inventory, Invoice

In the blink of an eye, your profitable business can go belly-up for a multitude of reasons. Whether it be a little “mom and pop” endeavor or a multinational corporation, they can all suffer from the same fate. Thankfully (and unfortunately) there are countless individuals who have experienced their company sink to rock bottom and have been nice enough to provide us with advice on how to avoid these company-destroying mistakes. Here are some of them, but keep in mind that having even one of these can spell imminent doom if not fixed:

Your company makes the customer irrelevant

Company leaders who are not sensitive to the needs of their clients and do not listen to them are already doing very poorly and are facing disaster. The reason for this disconnect might be because the managers believe the products are constantly in demand, are designed well, and the manufacturing falls within proper regulations. In other words, they see no use in talking to potential buyers because they assume there is a constant stream of them. This leads to a decline in innovation and eventually most companies that sell the same thing will surely be surpassing them.

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Concentrating on one type of customer

When 50% or more of your company sales are dependent on one type of customer, this is known as customer concentration. Customer concentration must be avoided at all costs. Dependency on a predominant client is a terrible idea because if that client decides to select another vendor or pursue another strategic direction, you’ll be well on your way to filing for bankruptcy because of the sudden and enormous loss in revenue.

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Your company is dishonest

A lot of business leaders are not the most legitimate people. Historically, we can account for hundreds of leaders who have stolen from shareholders and employees. Lack of managerial integrity is the reason why many companies fail. The path to making a quicker buck will also be the path to quicker jail time sentencing and quicker business failure.

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Your company is part of corrupt culture

Adding to a dishonest company to people externally, there are also companies that are dishonest and unfair to its workers and customers internally. Mistreatment of employees happens more than it should, but gladly most of the time it leads to that company’s failure. Moreover, a company that is only focused on how it can take advantage of business relationships in order to secure gains with absolutely no losses will also surely fail. Greedy leadership is the prime suspect here.

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Terrible customer support and service

As previously mentioned, company managers who do not keep their customers in mind at all times are doomed to fail. On the other hand, promising things and then not delivering will generate a lot of unhappy clientele who will very well decide to pursue other vendors. If you want to be successful, it all starts with proper treatment and respect for your clients.

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No dream, no tangible thinking

Some way down the road, or even sometimes at the very beginning, a manager will sit down and start to question why they started their company or why it exists in the first place. This is a huge problem. Others will not exactly have a clear and tangible image in their mind of how their company can achieve success and growth. This is also problematic. This means that the wrong people are in charge, and can lead to inconsistency in decisions, lack of company vision and fundamental backbone, and of course, loss of general business direction. A huge company-killer.

Companies should always reinvest money

Your company has bad money management

Managing money is just as important as managing a successful growing business. You cannot have one without the other. Most of the time it’s not a matter of not sticking to the plan, some managers don’t even make one that considers conservative, expected, or extraordinary performance and what to do in each situation. Naiveté with money management leads to company insolvency, a definitely unfixable problem.

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The wrong workers are hired

I’ve been talking a lot about the wrong type of leadership, as company failure usually starts there, but hiring the wrong workers can also be extremely problematic. Incompetent, disruptive, negative, dishonest workers hurt the company’s internal growth, vision, and profitability. In order for your business to succeed, you need employees who are committed to your company and what it is striving to accomplish. Workers that couldn’t care less should not be a part of it.

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