Most Common Business Mistakes Made By Business Owners
Have you made any of the most common business mistakes? As a business owner, you need to know every area of your business. But the most important area is business development. Without new business, your business will die. You NEED business growth, plain and simple. See also Top 10 Small Business Mistakes
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Many businesses make mistakes. Here are the 12 most common ones I’ve seen:
- They ignore their existing clients
So much time, energy and money are spent chasing new business with new marketing campaigns, new bid opportunities, new introductions. While new sources of revenue are essential, many forget to tap into the needs and interests of existing clients. Worse yet, existing clients don’t always know about all the other things you, or other members of your team, can do for them. Before targeting unknowns, don’t forget to continue nurturing your existing clients. The old adage (it costs more to win a new client than to win business from an existing client) is definitely worth remembering.
- Assuming that your customers are loyal and satisfied
Having customers who pay your bills is great, but don’t mistake a paying customer for a loyal customer. There are many studies that show the gap between service provider and client perceptions of whether the work delivered was high value. In many industries, even if you’re one of the big four, six or whatever number, you are usually still just one of a homogeneous group. If there isn’t something standout about your work, your service or your relationship with your client, they are just waiting for something better to come along. What are you going to do to make sure that your clients wouldn’t dream of going to anyone else? When was the last time you asked your clients what else you can do for them, to ensure that you are fully meeting and exceeding their business needs?
- Thinking your clients like you so much they will refer you
Your clients have their own business to run. They don’t automatically think of you when opportunities arise. Unless you ask them…. Anytime your client says thank you for something you’ve done, ask them if they know anyone else who might need similar help. If your client mentions they have a connection with an organization you’d love to work for, ask if they would be able to facilitate an introduction.
- Assuming your client will always be there
Sticking with the existing client theme – don’t get caught on the wrong side of a spring clean. When new people come into a leadership position they inevitably want to make their mark. As part of your client relationship planning, consider the tenure of your contacts, their political acumen, promoted, terminated, moved to another company or earmarked for new responsibilities. Who’s being copied on messages? Who’s being invited to meetings? If your contact was to go, who else in the sphere of influence do you have a relationship with?
P.S. If your contact does leave, you obviously should follow them too…support them in transition, congratulate them on a new role, show an interest in the changes they are
living through and you may just get 2 accounts for the price of 1.
- You KNOW your client, and you KNOW what they need. Right?
When you know your area really well, it’s easy believe that you know what the client needs – better than they know themselves. If only they would listen! What you offer may well be a better solution than the one the client is looking for, but unless you focus on understanding and meeting their needs first – before demonstrating how what you do will exceed their expectations, you are wasting your time and potentially losing a sale.
- Not understanding your client’s processes in decision making
Your contact may love what you are offering. They may even be convinced that it’s exactly what they need to solve their business issues, but that still doesn’t guarantee a sale. Once you have convinced them, who do THEY now have to convince? Where does this project fit within the wider organizational initiatives? Where do they sit in the investment pecking order? What can you do to help your client secure the funding to deliver on your project? How can you help them make the internal business case/influence their decision makers to secure closure to your deal?
- Bringing too little to the table
I get it, your service, value proposition or product offering is the best available. That’s a given! You wouldn’t even be AT the table unless you had something good to offer. That’s why they call it “table stakes”. Only offering what’s expected is isn’t going to secure the work. Now bring them that one little thing that no one else thought of. What’s something you can do to help them in their business? Who are you able to introduce them to?
- People you meet will automatically think of YOU next time they need something. Right?
Some seem to believe that networking is about accumulating contacts, adding more names into a database and handing out business cards. Some go so far as to occasionally send out a newsletter or an annual greetings card. Seriously, is this all it takes to secure your referral? So why would you think it’s enough to ensure that people will consider you the next time someone asks them “do you know someone….”?
- Sending an RFP before pre-existing relationship is formed
I’ve been asked to work on way too many requests for proposal (RFPs) where the probability of failing dismally could be predicted with confidence. No pre-existing relationship, no advance warning that an RFP was coming, very little defendable expertise in the required areas, the list goes on. Why do people insist on using time, energy and resources to pitch for a piece of low probability work. Instead of viewing an RFP as potential work, it should be viewed as an opportunity cost. How much more productive and profitable could you be if you were to invest that same time and resources in face to face meetings with existing clients. Before putting in a bid on an RFP, quantify the probability of return on investment.
- Giving discounts
Giving it away isn’t selling! With all the time and effort invested in setting rates and prices, why feel the need to drop your price in order to secure the work? If your prices are competitive, and you are offering value, your clients will be interested in negotiating. If you offer a deep discount right off the bat, they will wonder how much further you might be prepared to go. Instead, if clients request a discount and you are willing to deal, keep the reduction slight and provide a reason why you are willing to shift ( i.e. investment in relationship, Existing knowledge reducing your learning curve etc. It should be a goodwill gesture at best, not an indication that you lack confidence in your pricing structure.
- Not following up
I hear this all the time as a reason why people don’t follow up with the people they meet. They don’t have a good reason to call, they don’t want to waste the contacts time, they don’t want to feel awkward. Business is about relationships. Relationships are built on contact and exchange. If the only time you ever contact someone is when you are trying to ‘sell’ them, the relationship will be very stilted. Instead, find excuses to call. Read the news, follow their industry, monitor their business, see what their competitors are doing. Make up excuses to call them e.g. “I was just going back through old messages and I wondered how you are doing…”
- Thinking you are good at something you’re not
If we limited what we do to only those things we are instantly great at, without pain of experience and practice, we would never cook, dance, play music, cycle, swim, read, and the list goes on…. Yes, business development can feel awkward, uncomfortable, requires effort, requires discipline, requires practice, requires failure so we can learn from mistakes. But then again, isn’t anything worth doing, worth doing well?
What do you think? What are some of the most expensive business mistakes you have made?