Small Business MythsPosted by Factor Funding Co. on August 7, 2012
Small business owners face an uphill climb when they're first starting out. Unfortunately, some entrepreneurs have fallen prey to common myths about achieving business success. Here are 10 small business misconceptions that don't hold up in the real world.
1. It's best to cave in to the customer.
The old adage that the customer is always right doesn't apply in all situations. To keep from catering to customer whims listen to their viewpoints and then explain how your company can suit their needs.
2. People will automatically line up for your products.
No matter how valuable your product is a line of customers will not magically appear at your door on opening day. You'll need to convince people that your product is beneficial and then spread the word through effective marketing.
3. No figure matters more than sales.
The most important number on a financial sheet is cash flow since you'll need cash reserves to pay expenses, make improvements or keep the business going during slow periods.
4. Agreement is an important part of morale.
Ultimately, it is your job as the boss to promote cooperation by enacting workplace-wide guidelines and applying them to all workers. When your guidelines are clear you won't need employees to agree in order to get them to cooperate.
5. Owners don't need to keep up with the finances.
Many entrepreneurs are only too glad to outsource their accounting but it's still important for them to stay up-to-date on the company's finances. These numbers are critical to determining business expenses and cash flow each month.
6. Low prices are the key to successful sales.
Affordable rates are only a part of a successful strategy. Customer service and product availability are also important to retaining clients.
7. Keep customer expectations low to ensure continued business.
Instead of intentionally lowering expectations so that you can deliver items quickly aim to exceed your customers' expectations over time.
8. Profits are the most important part of success.
Profits are an ultimate goal but when you're first getting started you'll need to keep an eye on increasing cash flow. Focus on building brand value over the long term instead of making a fast profit.
9. Social networking is essential.
The truth is that you should follow your customers wherever they are. If your client base doesn't have a social media presence you may be wasting your time.
10. You have to spend to earn.
If you spend on unwise expenses you'll only reduce your profits. Carefully evaluate each expense and then assess its value to the business.
If you avoid falling prey to these small business misconceptions your business has a greater chance of succeeding in any marketplace.