There are no well defined short-term and long-term goals. As a result, there is no understanding of costs, responsibilities, markets, funding needs and other requirements of the business.
Before long, the owners of the business run out of steam and find themselves back to the drawing board. Therefore, it is critical for business owners to have a clearly defined plan for their business. Also, a business data room that contains all critical information about the business is essential. This will come in handy when talking to investors or when seeking funding.
In small businesses, often the owner is the go-to person. They are the main source of contact for everything to do with the business. They deal with customers, suppliers, employees, production, admin, dealing shareholders and putting out fires in general. This leaves them with little time to run the important aspects of the business. They have no time allocated for growing the business and attending to strategic issues relating to the business.
This is why it is important for business owners to identify, early on in the business, aspects of their businesses that they can handover or delegate to their assistants or other people in the business. This will, in turn, free up their time to focus on what matters. According to the UWC report, a personal initiative and goal setting are consistently related to business success. In other words, a business owner who is always reacting instead of proactively dealing with issues is more likely to fail than one who proactively deals with issues.
You often hear people say, "This is my business. This is my money. Why can't I get the money out? The owner had a gambling problem. As a result, he spent over a million rands over two years in gambling. None of the winnings would come back to the business and no taxes would be paid over to the authorities for the business.
While this business is still there, it consistently had cash flow problems and may not be around for a very long time. Using a company account as a personal account will no doubt cause a lot of confusion. Business owners will struggle to keep track of their costs and will find it difficult to measure their profitability.
Secondly, they will create significant loans accounts in the business, which will be difficult to clear. As a general rule, business owners should decide on how much they need to survive on a monthly basis and pay themselves a salary from the business, obviously taking into account the cash flow and tax implications of doing so.
Secondly, one should not owe the business unless they have a solid plan of paying or reducing this loan in the future. Many small businesses lack proper financial records and systems and technology. This could be related to the fear of the cost or fear of the unknown when it comes to technology.
But, many businesses that have adopted cloud accounting and other technologies have achieved efficiencies in a number of areas of their business. This is so because they no longer spend a lot of time on manual processes. Having data in real-time has also improved the way and quality of decision making in many small businesses. For many small businesses, technology should not be seen as a threat but as an ally. Small business should, therefore, be proactively looking for technology solutions before the lack of it throws them out of business.
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Your Practice. Popular Courses. Table of Contents Expand. Not Investigating the Market. Business Plan Problems. Too Little Financing. Bad Location or Marketing. Remaining Rigid. Expanding Too Fast.
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