Three Most Common Business Mistakes that Keep Business Owners Up at Night
Opinion Editorial by Gyl Kasewurm, AuD
I can recall many times in business when things seemed to be going well. The schedule was full, revenue was up, and patients were very satisfied with the services they received. Then, despite the forward momentum, everything would grind to a screeching halt! As a business owner, when this happens, you can’t help but wonder why. Of course, factors such as bad weather, long vacations, or world events are sometimes responsible, but more often, business slowdowns are attributed to slight and unnoticed changes. For example, perhaps pricing from suppliers increased slightly or previously successful marketing is no longer attracting new clients. These unexpected changes will inevitably force you to get back to basics of business, review the numbers, and uncover the problem. For me, business slowdowns often meant I had taken my eyes off the ball. I’d gotten so busy working in the business that I forgot to work on the business.
Here are the three most common mistakes that keep business owners up at night.
Number 3. Forgetting to monitor the books. Some business owners rely so heavily on their accountants to keep the business on track financially that they forget to monitor the finances themselves. This is a BIG mistake! As the business owner, you are more equipped to assess reasons behind a business slowdown than an accountant who is looking in from the outside. Unless the business is large enough to afford a chief financial officer (and most won’t be able to), it is our job as business owners and managers to monitor the financial stability of our businesses constantly. Accordingly, we must be ready and equipped to jump into action at any time when change is needed.
Number 2. Abandoning a proven process due to a small change in earnings. If your business isn't doing as well as you'd like, it’s easy to become impatient and try to shake things up with a new approach or a new product. However, best practices indicate that businesses perform best when they stick with what they do best. Instead of jumping ship on the processes that you’ve perfected, review the numbers, find an area of improvement to focus on, and go after it. You might just discover that something as simple as neglecting to schedule patients for a follow up appointment before they leave could be dramatically affecting your business’ bottom line.
Number 1. Not focusing on revenue generation or focusing too much on revenue generation. The number one priority of a business owner should generating revenue. I know. We all want to focus on perfecting aesthetics and making sure that we are serving the right product to the right person at the right time. But, remember, you can’t operate if you don’t have money to pay the bills. That’s why operating a small business is like walking a tightrope. It requires a balance of focus on operations, marketing, management, and finances. Spending too much time on marketing or managing employees detracts from revenue generation, but spending too much time on revenue generation can strain marketing and management activities. Either way, ignoring key performance indicators of the business will cause you to lose balance and the bottom line to suffer.
So, what can you do to avoid these common mistakes? Simply take time to review your profit and loss statement each month, and compare it with your numbers from the previous year. Has profitability increased or decreased? Is the cost of goods higher or lower than previous months? Have your accounts receivables gotten out of control (your total receivables should be less than one month of average sales)? While it’s easy for a business to get off track, keeping a close watch on your numbers is the best way to avoid the dreaded slow down and to get a good night’s rest.