As a small business owner, there will be facets of running your company that you excel at and areas where you struggle. However, there will also be blind spots – issues you fail to see that could ultimately be costing your business time and money.
In this article, we will uncover some of these blind spots to give you and your business the best chance of success. Let’s get started.
If delegation is an unthinkable concept to you, change this attitude now. Knowing when to hand over specific tasks will free up a considerable amount of your time and let you either focus on other jobs that need doing; or just as importantly, provide you with a well-earned break.
The ‘70% rule’ states that if another individual within your business can do a job 70% as well as you can, it’s time to free yourself from the burden of that task and pass it on to them. Not all tasks are of paramount importance, and not all tasks need to be completed to perfection. Sometimes the most important thing is being able to tick a job off as ‘done’ and then move on. This thinking is fundamental to the 70% rule.
If you’re in a position where you are employing other people, you need to demonstrate your trust in them and let them handle some of your work – otherwise, what’s the point of having them on your team? Control is one of the key reasons why business owners choose to go it alone, but knowing when to relinquish some of this will help you get more done.
2. Invoice management
According to data, in 2022 87% of businesses reported that they were typically paid after their invoice due date, whilst more concerning data suggests that 22% of businesses may have to make redundancies because of unpaid invoices.
Late payment and non-payment of invoices is a problem impacting a huge amount of small businesses. If your company does not have steps in place to chase non-paying customers, you need to implement some.
Get started by creating a firm and clear chaser email, then ensure that this gets sent at the below times:
- When the invoice is initially issued
- 7 days before the due date
- On the due date
- 2 days after the due date
- One week after the due date
If payment has still not been made 2 weeks after the due date, you should telephone the customer once a week (followed by an email). You may now wish to discuss a possible payment plan with the customer. After 2 months of non-payment, you should consider passing the debt to a debt recovery agency or issuing a claim to Small Claims Court.
The above steps can be tailored depending on how successful you are, but the important thing is that you have protocols in place.
3. Customer profiles
Wouldn’t you want to know if 75% of your customers were females aged between 20 and 30? Or that the majority of your buyers lived in London?
A customer profile (also referred to as a user profile or buyer persona) is a description of your current customer base using the demographic information that you have. It should be made of data relating to geographics, demographics, psychographics, and behaviours.
If you haven’t built customer profiles, you are taking a shot in the dark every time you create a new piece of marketing. Website copy, product descriptions, advertisements, emails, social media activity – all of it could be going to waste because you’re writing for an audience that may not exist. Use the customer information that you already have to help you reach the people that your product or service resonates with.
How much thought do you really put into how you communicate with your team? From the in-person discussions you have in the office, the emails you send, your instant messages (through tools such as Microsoft Teams), and your project briefs – how careful are you?
Poor communication – or no communication at all – is a serious problem for businesses of all sizes. If project information isn’t clear, it will result in incorrectly completed work. If an interaction with a team member is abrupt, it can impact morale. If a meeting has no structure, it can cause confusion.
What may feel like a small thing to you can have a huge effect on your business and the people within it. Good communication will provide stability, productivity, and a positive company culture. However, poor communication will create mistakes and a stressful, tense working environment. Consider each and every interaction that you have, by being mindful of the words that you use and the tone in which you use them.
5. The key numbers
When a business has been set up as a side hustle or hobby, it’s easy to be oblivious to the numbers that make up your cash flow and profits. However, this blinkered approach will put a cap on how successful your company could be.
You don’t need to be an expert in maths to run a business, but you do need a basic appreciation of your finances and key numbers:
- What are your expenses?
- How much do you charge for your products or services?
- How many people will realistically seek out a product or service within your industry?
- Of these people, if they find you, how many do you expect to convert into customers?
- How many customers will return?
Consider all of these factors to work out what your net profit margin could be. Then, get in the habit of documenting these figures as and when they change and as your own data pool grows. This will give you a grip on your finances.
6. The right management
Management is not a role where learning on the job is appropriate. If anyone within your business is taking on a managerial position – including you – relevant training must be provided and then revisited at regular intervals. This is crucially important for employees without any previous managerial experience, but also for those who have had a similar role before.
Being an excellent manager and leader is a skill worthy of the appointment in itself. Think very carefully before promoting a well-valued team member to a managerial role just because they are good at their current job. They will not be able to dedicate as much time to the role that they are proficient at – so you are effectively losing a worker, and they may not have the necessary skillset required for a managerial appointment.
A poor manager can have a devastating effect on a small business. Choose your managers wisely and take the time to provide them with all the support that they need.
How closely are you monitoring your competition? For most business owners, it’s not close enough, with a perfunctory look at competitor homepages and social profiles every now and then.
You can gain valuable insight into your competitors’ services, pricing, and general communications by regularly visiting their websites, blogs, Google ads, listings, and social media accounts, and subscribing to emails and newsletters. We recommend doing this research on a weekly basis.
This competitor information should inform how you run your own business. For example, is a competitor’s pricing structure different from your own? Do they use terminology that isn’t in your current lexicon? How often do they post on their blog? You can then give yourself a competitive edge by adopting the elements that work well and disregarding those that don’t.
If there is an area of running your business that you are struggling with or simply don’t have time for, outsource it. This is not an admission of defeat, it’s being a clever business owner.
Accounting, marketing, web design, graphic design, telephone answering, sales, and social media are all duties that can be easily outsourced. By embracing outsourcing, you can focus on the jobs that you and your team excel at, and have an expert in their field work on the areas where you don’t.
Let’s look at accounting as an example. You may have a basic grasp of how to file your Self Assessment tax return and your company tax return, but is doing this the best use of your resources? And how confident are you that you won’t make a costly mistake?
By working with an accountant, you will save time (that you can then dedicate to your core business), get peace of mind that errors aren’t being made, and you will probably cut some costs thanks to the accountant’s expert knowledge.
Thanks for reading
So there you have it, 8 blind spots that could be costing your small business. We hope you have found this article useful.
If you have any questions, or would like to share any business blind spots you’ve encountered, please get in touch with a comment.