In business, there are certain things that can spell doom for your company. With consumers oftentimes having various shopping options, it just takes one major mistake to turn them from a current to a former customer. Stay clear of these deadly business sins if you want to avoid closing your doors.
Overestimating Spending Ability
Recent news of even more upcoming job losses at oil and gas producer Santos may come as a shock to the affected employees. Executives will have their salaries frozen as part of Santos' desperate bid to cut expenses and maintain its investment grade rating.
But for those who track business operation practices and pay attention to the big picture, the trouble that Santos is in now may not have been such a big surprise. Santos got into this financial pickle even while producing is highest output in five years.
If they had kept spending in control, they might not be short now. But sometimes stellar gains can make companies think they can spend more than they actually should. Short-term gains may be erroneously seen as a new trend, when in reality they are just part of a larger pattern of ups and downs in the market.
If execs had been able to step back and see the bigger picture, they might have discerned that it would have been wiser to tuck some profits into a nest egg instead of handing out short term bonuses to executives.
As the following article looks at, do you want to know the 6 deadly sins of personal finance?
These could cause your personal doors to close.
Not Providing Infrastructure to Grow
The small business advocate group, Too Big to Ignore based in Canberra, lists what it believes are the top four ways that government can help small businesses.
One of those, build better infrastructure, can be applied to the workings of small businesses themselves. Small businesses frequently make the mistake of growing too fast before they are ready.
For example, they may have one successful retail store, have tremendous success, and decide one year to open six more stores. But they may not have put the infrastructure in place to support those six extra stores. They get mismanaged, suppliers can't keep up with the extra demand, or construction costs get out of control.
Eventually, things fall apart and the whole company sort of implodes on itself. You have to have a solid framework in place in order to grow your business safely. Without a solid core, it's like trying to ask a ninety-pound man to lift a house. No one can survive that.
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Not Recognizing Trends
Do you remember a little company called Blockbuster?
Decades ago, Blockbuster was at the top of the video rental market. They were even chastised for putting independent neighborhood video stores out of business. Yet people flocked to their shelves, paying top money for new releases and even old standbys.
Then along came streaming video. Blockbuster either didn't see the streaming train coming or they chose to ignore it.
Whatever the reason, while companies like Roku and Netflix were getting contracts signed with studios to show movies online, Blockbuster continued to sit on their blue shirt and khaki laurels, renting out videos to fewer and fewer people.
Eventually, people realized they could get movies delivered cheaper and not even have to leave their couches. Blockbuster only recently tried to catch a ride on the streaming train, but it's only a matter of time before their name is entirely forgotten. Don't bury your head so far into your books that you can't lift up your eyes and look into the distance. Learn to spot trends and figure out a way to keep your business relevant.
The times, they are forever changing.
About the Author: Kate Supino is both a small business owner and a writer who keeps up with the latest marketing trends so she can share them with you.