This article by Dorie Clark first appeared at Forbes.
Running a small business can be perilous. You have to become a jack-of-all-trades, sufficiently versed in sales, marketing, product development, customer service, database management, HR – and everything else – to keep your business growing. That’s why it’s so important to focus your attention on what matters, says small business consultant Barry Moltz, who is the author of numerous books, most recently Small Town Rules: How Big Brands and Small Businesses Can Prosper in a Connected Economy. In a recent interview, he revealed the most common mistakes he’s seen small business owners make – so you can take action to avoid them.
Avoid the “Double Helix Trap.” Too many small business owners are stuck in a boom-and-bust cycle, says Moltz – what he calls the “double-helix trap.” In other words, “When they’re busy, they don’t do any sales and marketing,” which means that when those engagements are over, they’re bereft of prospects. Instead, he says, you need to develop a strategy to “stay in touch with people over a long period of time,” whether it’s through e-newsletters, social media, or other channels. “Customers want to be educated now; they don’t want to be sold to.” That means you can’t simply barrage them with discount offers when you need to make a buck; you should concentrate on building a relationship and providing them with useful information all the time, so that when they’re ready to buy, it’ll be from you.
Embrace Your Strengths. In the past, many small businesses were embarrassed about their size. “We used to always want to be like large corporations,” says Moltz, because the ‘bigger is better’ mentality was pervasive. But that’s not the case any longer. “Now large corporations want to seem small,” he says. “People want personal attention and flexibility – the things small business owners can offer.” So focus on your customer relationships and ability to adapt quickly; that will be the ticket to your success in the future.
Cash Is King. Despite graduating from a top business school, Moltz recalls, “When I sold my business in 1999, I couldn’t read a cash flow statement.” And he wasn’t alone. “A full 95% of small business owners I talk with don’t know how to read them,” he says, and that contributes to a pervasive problem: “Most people focus too much on sales and profits, and not enough on cash flow.” Cash crunches are generally what sink small businesses, he says, so learning to monitor that metric is critical.
Complete Two Essential Tasks Per Day. Small business owners don’t answer to anyone – which makes it essential for them to eschew procrastination and get things done. “People mistake being busy with being productive,” says Moltz. But when you’re running a small business, you can’t afford to waste time on non-essentials. “At the end of the day,” he advises, “figure out two things you’ve got to get done the next day, and do those two things before you check your email, voice mail, or Facebook. Because when you check other things, you start reacting and lose control of your day.”
Are you a small business owner? What mistakes have you made, and how did you overcome them?
Dorie Clark is a marketing strategist who teaches at Duke University’s Fuqua School of Business. Learn more about her book Reinventing You: Define Your Brand, Imagine Your Future (Harvard Business Review Press) and follow her on Twitter.