Real advice from a business coach with decades of real-world experience.
After decades of small business coaching, I’ve seen it all and helped hundreds of Australian businesses over that course of time. If you’re a business owner, or business manager or considering getting into business, (before you skip this article or move into watching videos of cute puppies playing on your phone), take a few minutes to have a read. There are real and practical lessons in here.
Critical Mistakes Business Owners Make
#1 Ignoring Your Figures
Ignoring your figures can be a whole multitude of things. It might be that you’ve got mediocre at best bookkeeping happening and the figures are either late, unreliable or inaccurate. It might be that you really don’t know how to read those confounded financial reports that people put in front of you. It might be that you’re looking at the wrong things. For example, many business owners simply look at their sales and see, wow, I invoiced X last month, that’s fabulous. The slightly more savvy business owner will look at the bottom line (the profit) and see that figure. But that person isn’t taking into account personal drawings, loan repayments, capital purchases, which are all items which don’t end up on their P&L statement, but which absolutely do affect the bottom line. What about the invoices which don’t get paid, or are paid really slowly? Just because you invoiced an amount, it doesn’t necessarily equate to dollars in the bank.
Solution: Learn how to really read your figures, understand them AND know the metrics and ratios that you should be looking at. I teach clients all that, plus the things to watch for, and the right KPIs they should be monitoring for their type of business.
#2 Launching Without a Plan
Sure, I get it, starting a business is exciting and it’s often fun, and likely you don’t know what you don’t know. Sometimes new business owners misjudge who their audience is, or don’t clearly communicate what they are actually selling. For example, am I selling business coaching, or am I solving the problem of a business owner feeling stuck, isolated, or lacking direction by providing perspective, goals, strategic guidance, and personal accountability for growth? Some business owners waste money on things which matter less, like spending $1500 on a logo versus say $1500 on Google Ads. Yes, I know the branding people out there won’t be happy with me saying that, but when a business is new, the budget is often limited, so spend it wisely or you’ll burn through your cash.
Solution: Get a plan, do your due diligence, prepare financial budgets before you even start and walk it without your rose-coloured glasses on.
#3 Not Making Enough Money
This comes about in a few ways. Often those new business owners are nervous to charge their worth, and are unsure (and even nervous) about how to charge their true worth AND communicate that worth to the potential new client or customer. If they are cutting costs, they often hit what is easy; say advertising, rather than being strategic. That is trimming the fat, not the muscle in your business. Ensure that before you start your business you’ve got some cash reserves.
Solution: Get me (or someone like me) in your corner to help with all this. With a newer business, there is so much to do. I knew a young tradie years ago who said he didn’t need a website (because his ex-boss who had been in business 35 years and had a tonne of referral work and repeat business, didn’t need a website). After several weeks with virtually no new leads, he agreed maybe a website was needed. Once it was up, the leads started coming in, and today he’s extremely successful.
#4 Not Doing Your Due Diligence
Sure, I know that analysis and research and investigation can be a bit boring and even sometimes a bit hard. How saturated is the marketplace with what you’re proposing? How many massages will you have to do to cover that exorbitant rent every month before you even break even? Reading (and fully understanding) the implications of the fine print on an agreement from say a website designer who will always own your website, even after you’ve paid for it. I have a close friend (finance broker) who always says “the devil is in the detail”. People buy into franchising without understanding the long-term ramifications.
Solution: Research, analyse, read everything relevant and even look for information which wasn’t actually given to you. That is, ask questions, ideally in writing, so you’ve got answers in writing which you can reference back to if an issue arises. Or if nothing else, that you can re-read, or run it past someone more experienced to help guide you.
#5 Neglecting GST and Tax
I’m not an advocate for the ATO, but like births and deaths, taxes are part of life. What is quite common is that businesses pay their bills, pay themselves and then whatever is left, they figure is theirs. Whilst some businesses are great about putting money aside regularly for GST, often income tax is neglected. Then comes tax time, or worse, BAS time, you have a bill and nothing aside to cover it. Despite the current economy, the ATO is being tough and trying to recoup the billions which are outstanding.
Solution: Have a GST and tax savings account and transfer a percentage of your deposits for the week to that account. The trick here is applying discipline and not dipping into that account to pay bills, wages or repairs … which is frequently tempting.
#6 Hiring the Wrong People
I wish I had a dollar for every time I’ve heard someone say that they hired the wrong person. Sometimes it comes back to a lack of screening skill, or worse, they hire the best of the worst – that is, they took on someone below par, because there wasn’t anyone else. Another slack hiring practice is taking on anyone because they are easy; a sibling who can’t get a job, or the first person who reached out and looked ok, but you didn’t interview or screen properly.
Solution: I know finding good people can be sometimes hard, but that’s where I bring my experience in HR and running a private employment agency to the table. I have the resources, skills and experience to help you develop a process for getting the right team on board, and as importantly, keeping and retaining them.
#7 Being a Super Hero
When you’re new to business, one of the things people often do is – everything. They wear the marketing hat, the financial hat, the bookkeeper’s hat, the delivery man’s hat and even the cleaner’s hat. If you hired a cleaner two hours a week, how many sales and business could you bring in yourself in two hours? You emptying the bins is false economy. Same goes with you running offsite to go get some items from your supplier, to save a delivery fee – false economy. What about things which you’re not great at? Perhaps it’s financial or marketing? Even seeing clients use AI to create client agreements, versus using a lawyer, and then having issues later on, because Google isn’t a lawyer and hasn’t covered what is needed.
Solution: Know your limitations and ask for help. Whether that’s help to learn a skill, or outsourcing or delegating. There are so many options out there to get assistance – it makes more sense.
As a hybrid business coach, I do more than ask questions. I give advice. I teach, and sometimes yes, I also do. Every coaching session is purely about the client and their business specifically, which is why I am not a fan (and don’t offer) group coaching sessions. My 1-on-1 sessions cover what YOU need, when you need it and at a pace and level which works for YOU. I have a range of packages and am very flexible about my approach. I do give out homework to clients – but this is important work, not ‘busy work’ and as importantly, I follow up – so there is accountability. Want to know more about how I operate or what I do? Book in a sample coaching session today HERE. My passion is your potential!
