Small businesses are the heart and soul of the economy of a country, and ensuring their continued growth and productivity is essential to a strong and prosperous workforce. 99.9% of all businesses are small businesses but keeping them ticking means ensuring they make few mistakes and operate at their optimum.
Almost 50% of the private workforce in the country works for small businesses and as a business owner, this means being responsible not only for the health of your organization but also of your employees. Minimizing simple mistakes may not always be easy as you are dealing with challenging and high-pressure situations, but here are five common errors that can make a big difference to how your business operates and how it profits in the future.
The common errors you should avoid at all costs
1. Thinking that you can do it all
As a business owner, manager, or consultant, the worst traitor mistake to make is to believe that you can do it all. All great businesses are built around a team, and we can learn a lot about this valuable trait from other sectors. For example, doctors operate in teams where specialists only do specific tasks in the medical sector, and generalists handle day-to-day tasks. Why should a small business, even one with a small workforce, be any different. Yes, the general manager or owner who is also an MBA graduate may have a wide range of skills, but the best way to ensure business strength is to have specialists performing key business functions.
2. A professional human resources outsourcing for HR support.
One of the specialist functions that are too often taken for granted is human resources. Too often, because they have a small workforce, start-ups and small businesses neglect their people. This is a serious mistake as employees are the heart of any business, whether big or small, and ensuring their loyalty, productivity, and continued drive is not only good for them but good for the bottom line.
Good HR is not only about keeping current employees happy but also about recruiting for the future, retaining talent, and training your staff to future-proof your business. Whether you think you have a handle on payroll and benefits, human resources outsourcing is not only a smart move but can also be cost-effective and ensure greater productivity. Issues around diversity, accessibility and conflict resolution are specialized skills that no jack of all trades will be able to effectively manage.
3. Failing to access available software
With currently available software, all businesses can compete at the same level. Industry-specific applications and software, cloud-based applications, and infrastructure. Globally, the business software market is expected to grow around 11% between 2021 and 2028 and is currently worth over $389 billion. It is a massive sector and means that if you need a specific piece of software or an app to do something, it is likely available and even more likely being developed and improved daily.
Regardless of whether it is a small need or a significant operational task, there is likely to be a piece of software available to assist your business. The key to finding the right software is being clear about what you need, what the end goal is, and what it is going to cost. Often an initial investment in software might seem like a costly exercise, but that initial outlay may prove to be more cost-effective and end up saving the business money if it improves productivity and efficiency.
4. Hiring the wrong people
This is generally related to not having the right HR but is worth mentioning in its own right as it is a big one. A start-up or small business needs the right people from the get-go, for both ideas and simply hard work. Your business needs to realize the importance of this process and ensure that it is given the attention it deserves. Research has shown that hiring the wrong person can cost small businesses at least 30% of the employees’ first-year earnings. This is a mistake that can add up to a severe and significant impact on your bottom line.
Beyond the financial impact, hiring the wrong person can have a negative impact on other employees. This can happen as a result of many different factors. For example, it could be because of resentment at having to cover for someone who is not pulling their weight or feeling dissatisfied with the business as negative sentiment begins to catch from a disgruntled new employee. Regardless of the resultant impact, the negativity is avoidable by making the right hiring choices.
5. Not following the relevant legislation
Each industry, sector, even geographic area or country will have its own policies and regulations. Unfortunately, running a business means you often will not have time to research what those regulations are, how often they need to be updated, whether certification is required, or whether accreditation is the correct route. This is something that can be a very costly mistake as it not only puts your business at risk of fines but may cause reputational damage that can be extremely hard to reverse.
If you decide to take this on in-house, it is important to regularly check for the latest federal laws specific to your sector and your employees. You can also bring in an attorney to address specific challenges or questions you may have and assess your business’s compliance with local and state legislation.
Running a small business is often a labor of love beyond just a labor of productivity. With the rates of small businesses that fail in their first year around 20% and almost 50% failing within five years, there are a few mistakes that you can avoid to ensure you are not one of these. Being able to focus on your core business functions is essential but is not the only thing business owners can do to ensure their future success.