1. Too little cash
The biggest issue that most privately owned enterprises, large or small, have is money – or specifically insufficient capital. In normal times its wise to have at least three times what they think they’ll need to weather pressures on cash flow. In a downswing, managing cash is the #1 priority.
You may be profitable, but without cash, you will go under.
2. Underselling your value proposition
There is always competition, and often you are up against bigger companies with more resources competing for the same customers. But you don’t have to show it. Size does not always matter.
The solution is to focus on your own competitive strengths, advantages such as customer service, specific expertise, response time, added value benefits. Position yourself as the best in your particular market.
Remember, you’re not small, you’re better.
3. Assuming all employees know their roles
It’s a never ending surprise to us to see how many businesses, even large one, do not have updated and relevant job descriptions for all staff. This includes $100 million plus organizations. Ironically, it’s often easier for a small company to manage what employees are doing.
There is a whole body of research into employee motivation that shows a direct link between clarity of job responsibilities and high level job performance.
Everyone needs a job description.
4. Underestimating the importance of your brand
It’s not without reason that major corporations dedicate their organizations to building brand equity. Think Nike, Coke, BMW, Apple, and how these brands have such strong emotional connections with their customers. Everything that these companies do is directed toward building and supporting brand values. These brands have a clear USP, not created by accident.
Your brand needs to be differentiated from your competition. It must be nurtured. All activities must consistently support its positioning.
All communication by the business should reinforce brand value.
5. No Vision
Every business should have a vision of what they will be 3 to 5 years out. The Vision needs regular examination, every year, with key stakeholders. The more focused the vision, the greater the chances that the business will realize its goal.
The vision is often known to management, but not to staff. The Vision should be shared and understood by everyone, to the extent that it is translated into specific annual job objectives and accountabilities. This will result in alignment to a common purpose.
A shared Vision creates a platform for success.
Plutus Consulting Group