It is often said that making mistakes helps improve people. However, it does not mean that you should run straight into mistakes on purpose. In business, each mistake will cost you a lot of money and reputation. Thus, trying to learn after each hiccup helps you avoid them in the future. There 4 common but serious financial mistakes you need to be aware of.
Only see the big picture
People tend to criticize others who do not have a view to see the big picture. When starting a new business, you might have heard from many experts telling you to do small but think big. Nevertheless, many people fail to do both as they focus too much on the big picture and forget to pay attention to every single detail. They spend days and weeks planning final goals and what they want after 10 years running businesses. Whereas, short-term goals which they take granted are what make those dreams come true. They only consider some of the biggest sources of expenses and ignore the smaller one. This will cost you all your budget before you get to the far away from finish line.
Of course, long-term goals are essential as they keep your mind clear, help you go straight ahead without losing direction. However, you need to walk before you run. Try to plan for short-term goals to meet daily needs and maintain business. Besides, you can not just teleport to the final destination, you need to take step by step firmly. And small goals are those necessary steps for your firm foundation. They provide you time to stably expand the business by expanding each part first. Planning for small targets will help you recognize all types of costs incurred daily based on which you can find out what is really essential and what can be cut off to save budget.
Fail to make use of free and available resources
Before the invention of the internet, people merely had a few sources of information to access, mostly through books and newspapers or they had to travel thousands of mile to a conference. However, with the development of the internet and technology, you can stay at home and access to lectures of many world-class experts on Facebook or Youtube any time you want. And most of them are free yet invaluable.
Although each business suffers from different situations, you can still find a lot of general advice that is helpful in many cases. Or even if you can not learn anything from those general situations, you can dig deeper to experts’ contents in your specific business field. Their research and lectures are usually published online or in business magazines. The point is you need to take time to search. Instead of spending a huge amount of money or even going debt just to hire a business coach or consulting agency for any problems, you can take advantage of those free resources to save a lot of budgets.
Excess costs
When you run a business, money is not your only resource. Time and labour are also limited and so important that you need to keep an eye on frequently. For example, you should set up strict rules stating clearly what is not allowed during working hours such as Facebook updating or Instagram posting. Those distractions will decrease employee’s concentration and lower their productivity. It will be excess costs for your time and human resource.
Contracts with clients are also a source of excess cost. If you are familiar with project and contract then you might have been suffered from “mission creep” in which, what you have to provide way more than initial terms. One day, a client just shows up and asks for some additional perks or some alterations without paying any extra fee. Those changes might make you reset the whole projects with a huge amount of costs and because you want to keep that client, you blindly accept them all.
Thus, in order to avoid that situation, you need to clarify every detail right from the start and state clearly that any additional services need to be charged as usual. Moreover, any changes must be related to and not affect negatively to the whole project. You can still do some little things for free as a privilege to lure customers yet they need to be pointed out clearly. Clients need to be aware of what they will lose and get from additional details.
Fail to take advantage of credit card
At the first stage of starting a new business, you might need cash to maintain daily operation and do not want to accept credit payments which can generate extra fees. However, credit card payment is now very popular and many customers are only willing to pay under this method. As a result, by not accepting it, you might push away many potential clients and reduce a large amount of revenue.
In contrast, if you accept credit card payments, your customer base will be more diverse. You do not have to waste time traveling to each client and ask for cash. You do not have to pay transaction cost of other types of money transferred through bank accounts. Besides, you will be able to manage bill and invoice more easily.
Not making any mistake seems to be impossible unless you do nothing. However, you need to learn your own lessons after each mistake to improve yourself and stay away from those mistakes forever.
