How much could your business save?Find out now!
Or, you can call us on:0800 411 8830

Mistakes every SME makes (and how you can avoid them)


This article was updated 16th September 2016

Many people dream of running their own business, but there are downsides to being the boss. We look at some of the most common mistakes business owners make, and how to avoid them. 

Not embracing the admin

Small and early stage businesses often don’t have the cash to hire admin staff, and you may resent taking a step back from what you love. However, ignoring the admin in the short term can mean more headaches in future. Whilst you may not have gotten into business to manage cash flow and tax returns, by keeping on top of these areas you can ensure that your company continues to function at its best.

One of the biggest headaches for companies is chasing invoices. If you have a lot of contracts with large businesses, you may be frustrated by long payment terms – sometimes up to 120 days. Joe Friedlein, founder and managing director of digital marketing agency Browser Media, says big companies’ payment terms can leave SMEs hanging. “Bigger companies often have longer payment terms and no flexibility – if you’re waiting 120 days for payment as an SME it can be pretty challenging to manage cash flow.”

Curb late payments by working with a mixture of small and big companies, and always keep an eye open for new business opportunities to keep the pay dates rolling in.

Build your network

It stands to reason that the larger your network, the more business opportunities will come your way. If you’re lucky enough to secure a few big contacts in the early days, it may be tempting to rely on them, and stop looking for new business. However, that puts you in the precarious position of being dependent on just a couple of clients. Keep pushing the word out and building your network, even if you have to turn away clients. That way, if the worst happens and a client leaves, you can quickly fill the void.

GoLocalise, which provides translation, voiceover and recording services, learned the hard way not to neglect marketing. “We put all our eggs in one basket and when two years later we lost two big clients because they in turn had lost contracts; it was very stressful,” says managing director David García González.

Making time to diversify your client/customer base is always a sensible business insurance policy. Ensure that you have a website, social media presence and advertising plan.

Do your research

Alex Grace, marketing director at personalised clothing company Banana Moon, says letting staff choose images for a blogging scheme led to a brush with copyright law. “A few years later an image rights company found the image in a tiny square on one of our old blogs and billed us for its use. While we were perhaps naive, it’s difficult for an SME to keep up with all the latest developments in fields such as this.”

Using unlicensed images or copying text can seem like a low-risk, cheap way to boost marketing. But today’s technology means ‘crawlers’ can find even the tiniest infringement. The big corporates that tend to own the rights are often extremely inflexible about even innocent mistakes. Fines tend to be hundreds of pounds per use, or more.

Shooting for the stars

Lofty goals are something shared by many entrepreneurs, and having high expectations is not automatically a bad thing. But make sure that your belief in your business doesn’t blind you to cold hard facts. Be sure you walk before you can run – yes you may see your business as having global potential, but it needs to become a national success first. It’s about managing your own expectations as much as anything else. If you’re realistic about the market, you’re less likely to get frustrated when you hit a roadblock, and more likely to be prepared for hard times.

Not looking beyond your main competition

 

Competitor analysis should be a pivotal part of every business plan, but you’re missing out if you stop at your main competitors. Keep an eye out for up and coming businesses in your space, particularly if they have a new way of doing things. Likewise, is there a business in a different sector who’s talking to your target market? Taking inspiration from outside your niche will help to boost your creativity, and allow you to set yourself apart from the crowd.

What’s your management style? Click here to take our quiz

Related Articles

the week's energy news

Energy News 17/02/2017

Want to know what’s big in the world of energy this week? Check out our roundup of the big stories from the ...

Read More
biographies to read in 2017

12 books about real life entrepreneurs to read in 2017

2017 may have just begun, but that doesn’t mean that we can’t plan our year of business reading.   Be...

Read More
Pub - what businesses will lose out due to the business rate refresh?

Who are the winners and losers of the business rate changes?

The latest change in business rates is causing controversy across the country, with many claiming they will b...

Read More
Excellent, 9.7 / 10

Thanks for your help Mark Weeks and Switch My business

"I would like to thank Switch My Business and particularly Mark Weeks for the ease of switching and saving me money! I can highly recommend them. Thanks again Richard Blake"

This review was posted by Richard Blake on the 22nd of February 2017

Aaron Gallagher

"Aaron sorted out a new electricity deal for my church, enabling us to make good savings. We have now received confirmation of our new 3 year plan.During our telephone conversations Aaron was always very polite and efficient. Dawn Marskell"

This review was posted by Dawn Marskell on the 21st of February 2017

Great help switching

"First time I have ever done an energy supplier switch, it seemed a bit daunting but the way EDF has rocketed our industrial energy bill I had no option, Bea Luseni guided me through the process and took all the worry away, many thanks well done"

This review was posted by Horatio on the 17th of February 2017

Very knowledgeable and helpfull guys

"I had Mark Weeks help me to switch from N Power to Dual for my business electricity and he was fantastic. not one question/query that he couldn't answer which made the switch very easy. So glad I have done this and thanks again Mark."

This review was posted by Colin McKirdy on the 16th of February 2017

1st Class service from Kabibi Luseni

"From Start To Finish very easy to Move Suppliers . That's why I Now use SMB . Allan Wright"

This review was posted by Mr Allan Wright on the 16th of February 2017