Is your business leaking profit, but not sure how or where? Fix these four bad business habits to plug those costly leaks.
Everyone has some bad habits. But our bad business habits can seriously affect our professional goals and even the profitability of a business.
When bad business habits become a sticking point it’s time to roll up those sleeves and fix them. Because when you don’t nip them in the bud, bad business habits become all-too-common money leaks.
Here are four of the most common bad business habits and how to solve them for long-term success:
1. No Delegation = Too Much Work for Too Few People
When a business is growing, it can be hard to decide when to let go. But once you outsource work and hire teammates, it’s time to evaluate when you really need to have a say.
When a leader doesn’t delegate, it’s frustrating for everyone—even them. The results of poorly delegated work can include:
- Burn Out
- Employee Demotivation
- Slower Work
How to Fix it
- Invest in work/life balance: Everybody performs better when they have a balance of work and life. You probably know this is the case for your employees. But don’t forget about yourself. Time away from work can help you focus and increase your overall productivity.
- Pass off the administration: If your weekly hours are bogged down with administrative, HR and IT work, it’s time to look at enlisting support.
- Automate the little things: When time slips away from you, automating certain workflows with software is a great solution.
- Have clear roles: If your employees know what they’re responsible for, they can support you in maintaining your boundaries. Make and keep commitments to your team and hold them accountable, too.
- Set limits: Fight the instinct to do everything yourself. Part of leadership is letting go and allowing others to take on tasks you used to do. Remember: You can’t grow if you keep holding on.
2. Neglecting Your Finances… Until It’s Too Late
Who isn’t guilty of waiting until the last minute to tackle taxes. Or logging expenses only when they absolutely have to?
When you’re growing a business, the most important part of your day is the billable work. Until it isn’t…
Simply put: Delaying financial admin can really hurt your business. At best, it will mean a significant chore. At worst, it could lead to errors and missed deadlines.
To avoid this, you need to work with your finances regularly and consistently.
- Overly complex accounting
- Missing financial deadlines
- Unexpected tax bills
- Lack of visibility into financial health
- Financial cost of rebuilding messy systems
How to Fix It
- Stay on top of change: Even a small change to your financials can have significant implications for your taxes.
- Share with your team: The best way to learn is to teach. Share pertinent financial information with your team on a regular basis. As a bonus, their involvement will boost morale.
- Regular check-ins: Maintain regular communications with your financial advisor and/or accountant. As accredited professionals, they’re responsible for staying up to date on the ever-changing accounting and tax rules, so you don’t have to.
3. Hiring for Cost Over Quality
Too many business owners look at their staffing needs only in the here and now.
Real growth and scalability come from taking a long-term view of where a company wants to be in three to five years. The seemingly “cost effective” route can end up costing more time, stress and money. This often becomes clear when skills and abilities don’t scale to meet the business’s future staffing needs.
- The time and money cost of employee on-boarding
- Hiring and recruitment costs
- Low team morale
- Reduced quality of work
How to Fix It
- Build the company you want: Look three or five years down the road and think about who will serve you now and in the future. Look for them.
- Hire for potential: You won’t always be able to afford the rockstar with the diamond-studded resume. Hiring for future potential means you’ll pay attention to how the candidate will grow with your company over time. Remember: You can hire a rockstar or you can shape one.
- Involve your team: If you’re concerned that your existing team won’t click with your freelancers or new hires, make sure they’re part of the selection process. Give them a sense of budget and expectations, then see what their feedback adds to the process.
- Forecast for redos: There’s no way to get everything right the first time. So when you get work for a bargain (e.g. a quick and dirty website build), plan for redoing the work properly in your future plans.
- Focus on retention: The best way to avoid hiring costs is hire less often. Do plenty of research on how you can retain your employees so they stay loyal and give you their best.
4. Being Insecure…When it Comes to Data
Small business owners face a paradox when it comes to their data safety and security.
On the one hand, they tend to run lean and mean. This makes it more difficult to prevent cybersecurity issues like malware, data breaches and ransomware attacks.
On the other hand, business owners seem to be increasingly attractive targets for cybercriminals, with a reported 57% upsurge in attack volume over the past 12 months. Based on a new report from security firm SiteLock, the average small business website is attacked 44 times per day.
Any growing business needs to invest in security now to ensure that its most sensitive information stays safe into the future.
- $100,000-$1,000,000 in breach costs
- Reputation hit
- Anxiety over whether your business is protected
How to Fix It
If your company’s cybersecurity protection could use a reboot, the following three steps can help:
- Take your data and information to the cloud: Cloud-based technology is one of the safest systems that SMBs can invest in. Security protocols are constantly being updated by the service providers to ensure real-time protection for its users.
- Establish better security protocols: Your staff could unwittingly open the door to hackers and malware, whether through downloads or poor password control. Ensure that you document, disseminate and coach them on your cybersecurity policies. These could include data back-ups, multi-factor authentication or password management software.
- Bolster your network security solutions: Typical home-office security solutions simply won’t cut it for a business. Install next-gen network security features, including an internal firewall, as well as firewalls on any systems that employees use while on the go (especially their mobile devices!) This provides security against breaches and malware and also ensures business stability should a breach occur.
At the same time as you’ve been keeping your eye on the bigger picture priorities that have helped your business to grow and thrive, your company may have become susceptible to some pesky little bad habits that have poked holes in your profits and caused some capital to leak out. What’s worse, this is probably happening without you even realizing it!
The good news: If you take these steps to fix these problems, you can reduce costs and put that newfound money towards areas that will actually help you maximize revenues.
This post updated in December 2019.