228 - 5 Big Mistakes Your Small Business Keeps Making — And How to Correct Them
Small businesses are making a lot of mistakes that could have a major impact on their team members and bottom line. Terry Duncan, president of Duncan Management Consulting Services, has seen many of these mistakes first hand, and has guided many clients to correct these various issues.
Of course, it would be unrealistic to expect any business to operate completely free of mistakes. But if you learn some of the most common ones from other business owners and professionals who have been there, you can avoid falling into bad habits that can really cost your business.
Small Business Mistakes
Duncan recently shared some of the top mistakes he’s seen from small businesses in a phone interview with Small Business Trends. Here are the small business mistakes, along with some tips for fixing them.
1. Putting employees into generational boxes
You’ve heard all the generalizations: Millennials aren’t team players. Baby Boomers aren’t innovative. Those generalizations aren’t just harmful to workers, they can also lead to your business missing out on a great team atmosphere.
Explains Duncan, “It causes a negative connotation from the beginning. People can feel that tension when they come in and the business owner has already decided what their work ethic is like and how they’ll get along with other people.”
Solution: Duncan says businesses should simply hire based on merit, rather than taking any assumptions based on age or generation into account. In fact, if you can build a multi-generational team, your business could benefit from a truly diverse working environment.
Duncan says, “Give people the opportunity to prove themselves. Each generation has different plusses and minuses. And when they all work together is when you get the best results.”
2. Cutting prices to compete
When facing tough competition, it can be tempting for small businesses to simply slash prices to make products or services more appealing to customers. But small businesses normally only hurt their own interests doing this, as large companies are usually better equipped to absorb those losses. So driving down prices is almost never in the best interest of a small business.
Solution: Instead of driving prices down, focus on adding value to your product or service in other ways. Customers will often be willing to pay a bit more for something that offers a great experience. So get to know your customers and find out what it is they’re looking for in a purchase.
Duncan says, “Any good salesperson will tell you that people buy what makes them feel good. You have to talk to each individual customer and get on a personal level to assess what they want and be able to adapt and adjust on the fly.”
3. Being content with success
Success is great. But that doesn’t mean you should be wholly satisfied once you achieve any minor goal you set for your business. Some small businesses fall into a holding pattern once they’ve achieved some semblance of success. This can lead to a business falling behind the competition and slowly becoming irrelevant.
Solution: Remember the motivation you had to grow your business when you were just getting started. And while you’ll likely need some managers and other team members to step in and help with the day-to-day business operations, always keep an eye on the general direction of your business.
Explains Duncan, “You need to stay hungry and keep that fire in your belly that got you where you are. Entrepreneurs feel it. It’s what makes them start businesses in the first place. But as the business gets larger and larger, they tend to have less of a hands-on approach. But they need to be the driving inspiration behind what’s going on in the movement of the business.”
4. Handling all performance issues with associates the same
As your team grows, you might opt to create a human resources department to deal with hiring and other employment related issues. But Duncan warns against falling into the trap of handling all performance issues in the same way. This can lead to employees feeling even worse and potentially experiencing even more issues that could impact their work performance.
Solution: Instead of sending all issues to the HR department, empower team leaders to speak with associates who are experiencing issues right away. This doesn’t need to be a disciplinary measure. You can simply have your managers or team leaders speak with them and see if they need anything. Showing them some support can often help more than going right to some form of generic disciplinary action.
5. Following all generic advice
This doesn’t mean you shouldn’t follow any business advice. But there are a lot of blanket statements out there that don’t necessarily apply to every business. And following that generic advice is often what leads to mistakes.
Solution: If you read or hear something that doesn’t seem like it would work for your business, you don’t have to follow it. Instead, follow your instincts or seek out expertise from a professional who can give you advice specifically tailored to your situation.
Duncan says, “Each situation is different. Small and large businesses all have their own characteristics and have to do what’s best for them. And that’s the ultimate goal of a consultant — to find ways to improve each business.”