“Clarity trumps persuasion.” Dr. Flint McGlaughlin

Quite often the urge to make a sale overrules the reality of a potential customer’s thinking. To start with they don’t know anything about you, let alone your product or service. They’ll not understand why you are different and/or better than your competitors.

Trying to sell to them at the first interaction will rarely work.

The quote from Dr. Flint McGlaughlin “clarity trumps persuasion” suggests that you should firstly be clear about what you offer so that the potential customer is clear about how it could be relevant to them and their situation.

Start by educating

The mistake is to start selling when you should really be educating.

Educating can be done in a number of ways, from your website, to email marketing, to phone calls and coffee meetings.

Marketing is basically just starting conversations with potential customers about their situation and what you do. So when planning your marketing you could think about ways in which you’d like to start those conversations. Don’t over-complicate it. In starting those conversations you also get further insights into what they actually want and don’t want.

Marketing the right way, with a clear value proposition, makes it easy for customers to buy.

“So often people are working hard at the wrong thing. Working on the right thing is probably more important than working hard.” Caterina Fake

As a business owner you need to pay attention to all areas of the business, not just the aspects that you feel comfortable with. Many people starting a business focus on delivering a good product or service at the expense of other aspects of the business. Just sticking to what you know is a common small business mistake.

From specialist to generalist

You may have been a specialist in your field and be comfortable in that role. Of course you need that expertise to ensure a quality product or service is delivered, but you also need to be a generalist, covering all areas of business.

You are now what used to be called a “general manager”.

Titles such as CEO, managing director and senior partner are all basically general managers – they have responsibility for everything and as such are generalists with oversight across all business areas. Or to put it another way they are specialists at running businesses.

Learn to conduct

It’s a bit like being the conductor of an orchestra – all the elements have their part to play, they need to come in on time and be in tune with each other.

Your job is to make sure that music is produced and not just noise. Noise is easy, music is hard and concert-level music is very hard!

Make sure that you are working on all the things needed to make your business work and that all those parts come together and work together as an effective whole. Otherwise you’ll have a stop-start business, random fluctuations in profit and loss, wasted time and effort and a feast and famine roller-coaster of a ride.

See the big picture

It’s really the stuff of leadership and management – taking the bigger picture view, making sure all the elements are there and working well and seeing which pieces need to change, adapt or improve.

Just like you, a business coach is a generalist, looking across all areas of a business, seeing the potential and noticing what could be improved. Each business coach is different with their own specialist backgrounds, but it is the bigger picture view, how the parts fit together, which are missing and which are under-performing that really enables them to add value to a business owner.

Working hard in your specialist area is not the recipe for business success. The right thing to work on is how your business works as a whole. It involves a shift in mindset from specialist technician to generalist business owner. You can read more about the 4 roles of a business owner here.

“Number one, cash is king” Jack Welch

Many business fail because they run out of cash – even if they are profitable. If you don’t actively manage your cash position then it’s easy to get caught out.

The bank account can look fine, but if you’ve forgotten a significant expense that hasn’t yet gone out, then you could have a problem.

The cash might look fine for the next week, provided that the customer pays their invoice on time – but if they don’t you have a crisis.

Timing is everything

You probably have fixed costs going out like rent and salaries. These go out at the same time every month or every quarter, regular as clockwork, but your customers pay at varying times.

Timing can catch you out.

Customers might have their own cash problems. Or a dispute may arise and they withhold payment. Maybe they just forgot and you can’t get in touch with the decision-maker. Or they say they’ll pay, so you mentally stop worrying about it and stop chasing them.

Late payers or customers not paying can close your business very quickly. Credit needs to be earned – it is after all about faith and trust (credo = I believe – i.e. I believe you will pay – but trust takes time to build).

Understanding working capital

Balancing when you have to pay suppliers with when customers pay you often creates a gap and that gap needs to be met with what they call working capital.

If you need to give credit, then credit check them. Better still ask for payment upfront or at least secure some money upfront (e.g. 50% on order and 50% on completion).

It is also worth having some reserves in your personal finances. The business may not generate an income for you for longer than you expect or it might suddenly need an extra injection of finances.

Forecast ahead

Have a good cashflow forecast for about the next 3 months, split it down by week at least and update it regularly. If cash is tight you should be looking at it and your bank account daily.

If you understand and manage your cash position and where it’s heading over the next few days and weeks then you can sleep at night confident that you have the breathing space needed to take any corrective action if there is a looming problem.

“A goal without a plan is just a wish.” Antoine de Saint-Exupéry

Not having a plan makes it very difficult to organise resources, use time and money efficiently and to measure progress. Starting on a course of action without planning will almost certainly lead to unnecessary waste and needless changes in direction.

The power is in the planning

The main benefit of having a plan is the planning that has taken place – it’s the thinking that is of primary benefit.

It makes sure you know how you are going to move from A to B.

Writing down your plan can be as simple as you like (eg using bullet points) and as short as you like (e.g. on one side of paper). Your plan then acts as an aide memoire, keeping you on track when life gets busy and making sure that attention is paid to all the key things needed to achieve your objectives.

Plans create focus

If a vision gives clarity, then a plan gives focus. Set out the basic objectives for the next 12 months and some metrics to measure success by.

This makes you crystallize your thinking and focus your attention – after all they say that “what gets measured gets done.”

“A success that has outlived its usefulness may, in the end, be more damaging than failure.” Peter Drucker

Paradoxically one of the common small business mistakes is a result of success!

Early successes can be a bit too comfortable and can the sow the seed of future failure.

Many business owners start their business as they leave employment and carry a network of contacts with them. There is already a relationship there and work initially comes from them.

It’s comfortable and the business reaches an early plateau – the plateau of complacency.

Don’t be complacent

However one day that work dries up. The problem is that no marketing has been done to replace it.

Instead of using that time and income to invest in marketing they’ve spent it delivering the service and replacing their salary.

Or alternatively the initial flurry of excitement generates a buzz and some initial customers and a steady stream of work. The business reaches an early plateau – the plateau of complacency – and the initial energy dissipates.

There’s no problem until what was once new and interesting to customers becomes old and stale.

As Peter Drucker pointed out, a success can outlive its usefulness and quite quickly the business can run out of steam. If you only had one idea, which worked for a while and then customers got bored – what next?

Understanding life cycles

Charles Handy pointed this out in his book The Age of Paradox, that every product, service and business has a life cycle, it grows, slows and then declines and dies.

At its peak of success everyone relaxes because things are going so well. There is a mental shift into maintenance mode.

Paradoxically, all these green lights are actually a red light!

It is a sign that something else needs to be done. Inspiration is needed to kick-start something new when there are the time and resources necessary to get it going.

Inspire yourself

Staying inspired is essential – you need to be self-motivated and generate some energy to innovate regularly.

If you find yourself on the plateau of complacency then use that vantage point to your advantage – look outside your business for what you need to develop next.

“Everyone needs a coach. It doesn’t matter whether you’re a basketball player, a tennis player, a gymnast or a bridge player.” Bill Gates

So could a business coach like me help you avoid these common small business mistakes?

Or help you address them if you’ve already made them?

Yes of course!

The sorts of things we can work on together are:

• clarifying your overall business vision and objectives, creating a simple workable business plan to focus your efforts in the right place
• identifying the key numbers and performance indicators that you need to collect and monitor, what they mean and what action to take
• looking at cash flow, how to forecast it and some ways to improve it
• defining and refining the value proposition – working out what you offer and how to maximise its chances of success and profitability
• creating a marketing plan that will enable potential customers to see the relevance of your value proposition
• looking at each aspect of the business to see what’s working well and what needs attention – and creating an action plan to improve it so that all the component parts work together as a coherent whole.

Take preventative action to avoid these small business mistakes!

These 10 small business mistakes may be common – but you don’t have to make them if you don’t want to!

If you want to tackle some of the issues in your business then maybe now is the time – either book a call with me or see how your business shape’s up with the Shape Up Your Business Self-Assessment Tool.