Avoid These Business Mistakes
We all make mistakes - the small, itty bitty ones have no real impact on our lives but other mistakes can be life changing. With many businesses still reeling from COVID, there are mistakes people made in the past 12 months that will continue to have a ripple effect long past the pandemic. If you want to avoid these mistakes and how to recognise you are making them, read on.
The year 2020 saw the divide between good and bad businesses grow - what may have a slight gap became a yawning chasm. The growth of these is commonly due to one or more of these five mistakes:
1. Not getting advice and going it alone
When a catastrophe like COVID hits and the world stops dead in its tracks, the first instinct is to not spend any money at all, which is completely understandable. But it is important to take a pause, breathe and take stock of where you are at to stop panic from taking hold. Helping you take stock is your accountant. They can assess where your business is at and stress test where your business could likely be after taking into account changes in business strategy and financial assistance provided by the Government. During the early days of the COVID crisis I saw businesses missing out on assistance they were entitled to and others claiming it when they weren’t, all because they made the decision to go it alone without any help. The benefit from advice and assistance you receive will far exceed the cost.
2. Not having a cashflow plan in place for the end of JobKeeper
JobKeeper is set to end at the end of March 2021 and the Government has made it clear that there will be no further extensions of the program. This is going to have a significant impact on the cashflow of many businesses relying on these payments to keep key personnel and their doors open. With less than two months to go, there’s no time to wait to model your cashflow and assess what actions need to be taken.
3. Not having a marketing plan to bring in new customers or clients
Sitting hand in glove with your cashflow plan is your marketing plan. When COVID struck many business owners sat paralysed not knowing what to do as their sales stopped. Having a marketing plan in place to kick start your sales is critical to recovery.
4. Closed mindset and making decisions based on emotions not facts
The COVID crisis has been a test of resilience. Resilient people are open to new ideas, new ways of doing things and new opportunities. They are prepared to change direction if that is what’s called for. Furthermore they do their analysis before making any decisions. When you have an event of the magnitude of COVID your emotions are naturally going to take a hit and there is going to be resistance to the change that has been forced upon us. You will need to fight the temptation to sit in the pit of pity and open your mind if your business is to thrive.
5. Failure to recognise that the world won't go back to the way it was on 31 December 2019. The business landscape has changed forever.
There’s still so much uncertainty around how this pandemic will end that nobody can truly know what the business landscape will look like in the future. However, I’m prepared to bet that it looks nothing like the business environment on 31 December 2019. For business to thrive, it will need to continually innovate, assess and adapt which will require creativity, collaboration and persistence.
To avoid falling into these traps, join forces with your trusted business advisor or business buddy to keep you accountable and test you for any blind spots you may have in relation to these five areas.
If you would like specific advice tailored to your business and circumstances, Accounting Heart offers affordable service packages where you can work with Sonia one-on-one to help you get your business where you want it to be. Book your FREE Discovery Call to find out more.
Disclaimer: This is general information only and is not advice of any sort. No warranty or representation is provided by Accounting Heart Pty Ltd as to the accuracy, currency or completeness of the information contained in this blog. Readers of this blog should not act or refrain from acting in reliance upon any information contained herein and must always obtain appropriate taxation and / or other advice as may be appropriate having regard to their particular circumstances.