Five Financial Mistakes to Avoid as a Business Owner

Five Financial Mistakes to Avoid as a Business Owner

June 18, 2021 0

Financial mistakes business owners make are usually one of the most crucial flaws in growing a successful business. Nothing good comes easy. It is paramount to avoid such grievous mistakes. Especially when you are at startups or even excelling in the next level of your business success.

In Nigeria today, a good number of business owners only think about the profits they make and regular cash flows. This is a good focal point to consider, as revenues serve as a key motivating factor for business owners. However, no matter how small or lucrative a business can be, financial mistakes can crumble such huge successes without leaving a trace. 

Businesses and Financial Mistakes

Some of the major financial mistakes business owners make are often in the beginning when getting the business up and running. However, the underlying problem with many of these small mistakes is that fast results become standard practice. That is why it is essential to continuously observe and tweak processes and operations, especially at the start to ensure that they do not become consistent. 

Five Financial Mistakes to Avoid as a Business Owner
You must avoid financial mistakes to grow your business

Agricultural business, capacity building, health services small scale enterprises just to mention a few have yielded business benefits in the Nigerian economy. Let us understand key flaws that a business owner needs to avoid for the monetary gains and most importantly to satisfied end-users.

Businessman planning without an available market: 

It is highly essential to plan your business, huge losses can arise when a business owner has no available market. A business owner must endeavour to have obtainable customers for the product or service that you intend to build a business engagement with. The notion of assuming customers will patronise us without adequately gaining their confidence or at least providing unique values to your product or service can prove abortive.

Create awareness of your unique selling point and perform the business models to delight your customers. Many may presume this procedure can be financially tasked. I disagree. Following squarely expenses may seem like an arduous task, but it is the only way to have success selling operations. 

Every sphere of business comes with pros and cons. Planning your budget within your means can help you shape customers’ preferences properly, only if you have skilled and disciplined team members. It pays to be conventional in your spending until your business has a consistent track proof of profits. 

Watch out for budget-busters such as an office or retail space that’s too large or expensive, nonessential employees, and more or fancier equipment than you need. Be wary of taking on debt. 

As a business owner, you’ll almost certainly have to sign a personal guarantee on the amounts you borrow, so you’ll remain responsible for paying those debts even if your business fails.

Inappropriate Pricing: 

As a business owner, one of the financial mistakes you must avoid is unclear prices of your products or services. Proper research has to be implemented around your competitors, the quality of your products or services and the total influx of capital per production. 

Customers are easily attracted to the best prices. So, do your homework, if you are uncertain about your price tag, do not officially declare your prices until you are certain that your price adds value to you as a business owner and the customers.

The illegality of Business and Unfulfilled Tax payments: 

Businesses can best be defined on how you classification. Like clothes worn on a human body, we need to also be lawful about our business. Although a business owner can earn a good reputation by being credible, it is imperative to follow all legal guidelines. This is needed to make your business appear operational to the public eyes. 

Do what is proper at all times, and never be found wanting.  Your business gains confidence when you have your legal guidelines in conformity with the government.

Investing without delighting the customer: 

Another financial mistake business owners make is when you carry out your business without knowing what your customers want. Ask questions. Is there a need for this product or service? What am I offering that is different?  Carry out surveys on the opinion of customers.  Investing where there is no customer need is a long cry for help. 

Such business failures are avoidable. Have a forecast of your business venture, this can enable you to run across gridlocks on the way. A lady l met recently told me her business story. She had assumed her food business would thrive in any location but she was wrong. When she presumably started her early morning ofada rice and stew in front of her house, she was amazed at her competitors. They practically sold the same recipe and nobody bought from her for weeks.

She began to ask her customers questions on other alternative recipes they preferred. Most of the commuters who resided around her mentioned ‘Porridge with beans’.She was pleased with their request and soon began to change recipes. ‘Today, the whole area addresses me as mama porridge,’ she said. I never forgot those words. She was very lucky indeed. She adjusted quickly even at her earliest mistakes. Such losses could have been avoided. I’m certain you will agree.

Hiring inexperienced team members:  

It is resourceful to empower people, but empowering the right people for the job will take you to places where you never envisaged.

Take time to carefully select experts in your line of business with the same mindset. It is factual that great minds think alike. Sir, Richard Branson ideology of empowering people that are appropriate for their roles has proven to be one of his greatest achievements with the virgin brand. 

Incompetence has frequently been associated with many business failures. Entrepreneurs tend to be self-reliant individuals, but knowing your limits and learning to delegate tasks are important skills if your startup is going to succeed. 

Try to focus on the things you’re good at and enjoy doing, and find others who can handle tasks you dislike or require specialized knowledge. 

Conclusion

It is not enough to hire experts, a business owner can avoid financial mistakes by evolving the vision and core values of the business around your team members. Thereby creating an atmosphere where the business can thrive.

Julie Omeike
Julie Omeike
Julie Omeike
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