Watch your step! Business pitfalls and how to avoid them
April 4, 2018 | TS Bank
Andrea Fredrickson, CEO of Revela, a company dedicated to helping leaders and their businesses succeed, prides itself on being passionate, authentic, transparent and empathetic. The word Revela itself means “to reveal, make known, discover, and divulge.” All things that Andrea and her team help their clients discover in themselves.
Andrea knows that creating, starting and maintain a business is a tough task and without the right preparations and guidance can lead to the downfall of something that might have been a success. According to Andrea there are many pitfalls that can take your business down a dark path.
Here are 10 business pitfalls according to Andrea Fredrickson:
1. No Big Picture of the Future
For your business in the future what does five years look like? Will you have more people, locations, a succession plan? According to Andrea, “What you look for you will find.” Looking ahead even 5 years can be tough to visualize for a new business, but it is essential. Planning ahead helps you stay on track, and veering too far off can lead to derailment, and possible failure.
2. No Diversity
Not only in race or culture, but in thought. Diversity is important in all aspects, and different perspectives and personalities can be the key to helping push your business into new places. If your business stays stagnant for too long, you might get left behind, think about Blockbuster. Blockbuster chose to stay with the same business model even turning down offers to go digital. They didn’t change, but their market did.
3. No Cash
It is important to create a safety net. If an essential item for your business breaks down, and your business can’t function properly this can lead to further money issues and bad client experience. Andrea suggests borrowing against your money vs. spending, because once your savings are gone, it’s gone.
4. Working in Your Business Rather Than on Your Business
Many businesses fail because the owner is spending the majority of their time working IN the business, doing every day functions such as taking out the trash, waiting tables or cooking. It is important to delegate and hire others to do these task, we will get further into this topic later on. However, what will payoff is working ON the business, doing strategic planning, budgeting, marketing or sales.
5. Hiring your Friends and Family
Hiring and working with family is something that Andrea understands all too well. Although we love our family and want the best for them this is a situation that can get messy quick! If boundaries aren’t expressed right away working with a family member can damage the relationship and decrease business productivity. Andrea suggest laying out ground rules from the start and verbalizing consequences, let your family member know what your expectations are from the start!
6. No Systems or Processes in Place
One major issue in a business is that the owner is the only person who knows how to do everything! It is important to write out process, this makes it easier to train new staff and will help relieve responsibility from the owner who can focus ON the business as mentioned above.
7. Not Being Flexible or Being Too Flexible
Our world is changing quick! With this being said if you aren’t willing to change with it you’ll be left alongside Blockbuster. It is important to always say up on the latest trends in your business’ industry. Andrea recommends reading blogs, listening to podcasts, or joining a local peer group in your industry’s field.
On the flip side changing too much can be a pitfall as well. It is important to think if the change is going to better your business or derail you from your business plan.
8. Running Your Business With an Old Structure
For any business communication is numero uno. If you find that miscommunication is something frequent in your organization, you might need to rethink your business structure. A traditional business structure runs off of a hierarchy meaning you have someone at the top, then three below him, and 8 below them and so forth. This can leave a lot of room for miscommunication or even no communication at all. There are several different ways to restructure, try to find what is best for your business size!
9. No Succession Plan
How are you planning to leave the business? Will you sell, pass on to family, or liquidate? Succession plans are something that should be written at the beginning, and even possible before the business has even started. Planning your end not only helps you, but in the event of an accident or death helps your family members.
10. No Safety Net
This might be the most important of the 10 items listed. If you have no money you literally have nothing to fall back on. It is a lot easier to get a loan to help your business when you have collateral versus having no money and a failing business. Always, have back up money for times of emergency. In addition to having back-up cash available, it is also of importance to have back-up suppliers and/or vendors as well as knowledge experts to aid in times of need.
Andrea stresses these are only some of the pitfalls, however, they are a good start to helping establish a successful business.
Want to know more about leadership or thinking about starting a business? Reach out to Revela at revelagroup.com or (712) 322-1112.
Looking for a business loan or cash management services? Reach out to TS Bank at tsbank.com or (712) 487-3000.
At TS Bank, we IGNITE PROSPERITY® by helping our clients do more with their money. Whether it’s saving a little extra cash each month or accomplishing a long-term strategy, our goal is to help you transform your financial life. Call and schedule an appointment today, one of our team members would love to help you do more with your money at TS Bank. TS Bank has eight locations in central and southwest Iowa. For more information visit tsbank.com or call 844-487-3030. #igniteprosperity