It is easy for business owners to get stuck in old habits, and sometimes business practices are hindered because the employees and management are caught up in myths. Here are ten of the most common myths about small business management, so that you can check your systems and avoid these traps:
1. Cheaper priced items will attract more customers. Racing your competitors to the bottom on pricing is a hard path to follow. Instead of slashing prices to attract sales, create value for your customers. People will pay a higher price if they understand the value they are receiving.
2. I can write everything off. Some of the benefits of owning a small business are the tax write-offs that you can enjoy. But, don't get carried away by writing off things that aren't qualified as business expenses. Work closely with your accountant to identify legitimate business write-offs.
3. Tax season is the only time to look at profit and loss statements. Some business owners run their company with a blind eye throughout most of the year, and then they are shocked by the numbers they see at tax time. Instead of waiting until tax season to review the reports, make it a priority to look at tax numbers every month.
4. My business doesn't need a website. Even if you only make in-store sales, it is still necessary to develop a strong presence online. A website can drive potential customers to your store because they can locate your business online and then visit your retail location.
5. Sales are the top priority. Yes, it is important to look for ways to boost sales. But, you can quickly eat away at your profits if you aren't managing costs. Instead of focusing only on sales, it is also important to control your spending and focus on monthly cash flow.
6. My business will be profitable within six months. Even if you are an expert in your industry, it takes time to build a profitable business. Don't be let-down if it takes a few years before you see the higher profit numbers that you are aiming for.
7. Build it, and they will come. Every business owner has dreams about customers flocking through the door each day. But, the truth is that building a business doesn't necessarily mean that your sales will be booming. Business success is dependent on a good marketing campaign and connecting with your customers.
8. I don't need a business plan. Even if you aren't seeking outside funding, you should still put in the effort to create a business plan. This plan will be the guiding resource to help you reach your goals later on.
9. The customer is always right. The goal is to make sure that you are serving your clients, but there are some people who just can't be pleased. Don't get caught up with the one disgruntled customer… do the best you can, but know that some people are just unhappy.
10. A business can't run without incurring business debt. Just because you are running a business, doesn't mean that you need to accrue business debt. When you are working closely with an accountant and managing the cash flow of your company, it is possible to minimize debt and maximize profits at the same time.
Do you need help with the management of your small business? We invite you to contact us so that you can learn more about the financial services that are available: (202) 789-8898.