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Avoid Making these Scary Small Business Mistakes
  • 29 October 2018
  • Tiffany C Wright

Avoid Making these Scary Small Business Mistakes

In any business venture, there are elements of risk that you’ll encounter throughout the business journey. As a business owner, it’s important that you stay aware of the risks. Your goal should be to mitigate negative impact as much as possible with proper planning and preparation.

Whether it’s Halloween or any other day of the year, you’ll want to avoid making these scary business mistakes.

bc_20181029_Avoid-Making-these-Scary-Small-Business-Mistakes

Not allowing credit cards

Who carries cash these days anyway? Regardless of the type of business you operate, you likely use credit cards to help run and manage your business, and in turn, accept credit cards as payment from your customers. Cash-only businesses could be limiting their earning potential by excluding an increasing percentage of consumers that use plastic for all of their purchases.

It’s important to be aware of the processing fees and different tiered threshold levels associated with credit card transactions. As more and more consumers use mobile wallets like Apple Pay or Google Pay, you’ll want to evaluate near-field communication (NFC) transactions and how your point of sale (POS) supports mobile payments.

Focusing on your passion instead of your business

Many small business owners start companies because they are really good at what they do, and they want freedom from the corporate world or from being an employee. A marketing coordinator may decide to start her own marketing firm or a plumber may opt to start his own plumbing company. However, aspiring entrepreneurs must recognize that the business of providing marketing services and or performing plumber duties are just one piece of owning and operating that type of business.

There are many different components that you must consider and manage in order to be an operational business. There’s licensing, insurance, inventory, equipment, budgeting, invoicing, payroll, taxes . . . you get the picture. Many business owners take the approach of “working on their business” instead of “working in the business” – which means you may be doing less of what you’re truly passionate about, hiring a team to help you execute the day-to-day while you focus on running the business.

Underpricing

It’s a scary position to be in when you don’t have enough cash or revenue coming in. Sometimes in this situation, a business owner may make the mistake of underpricing their services – thinking that lower prices will drive more sales. Before making a change to your pricing strategy, you want to make sure that you understand what your breakeven point is. What do you need flowing in each month to cover the cost of goods sold, leases, payroll, insurance, etc.?

Look at your inventory or class of services that you offer and evaluate what your margins are. Maybe play with a good, better, best scenario to try out different levels of profit you can potentially bring in. Do your research to understand what the market can bare for similar goods and services. Keep an eye on your pricing strategy throughout the year so that you can adjust as needed to flex with trends in the marketplace.

As your local small business resource center, we hope that these tips help you stay out of the dark, avoiding scary business situations that can sneak up on you.

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