We all have a few bad habits. Maybe you bite your fingernails or really ought to give up those late-night snacks. While personal habits persist despite our best efforts to give them up, bad habits in your business can hurt your profitability, limit your ability to grow and possibly drive you out of business.
So let’s take a hard look at four business bad habits that are costing you money . . . and how to break them.
Data breaches affecting major companies such as Equifax and Target make the news, so small business owners sometimes fail to realize that they’re also at risk.
According to a public statement from Securities & Exchange Committee (SEC), small-to-medium-sized businesses (SMBs) are not only attractive to cybercriminals because they have fewer resources to prevent attacks, but they’re also far more vulnerable once they’re victimized.
The SEC reports that 60% of all targeted cyber attacks in 2014 struck SMBs, with the very smallest companies bearing the majority of the attacks. The average SMB attack cost businesses $20,752 that year.
Your business may not have a team of IT professionals guarding your data, but it’s essential to take precaution to prevent identity theft and hacking and ensure that sensitive information is secure.
Here are a few basics that you should implement, no matter your budget:
A common mistake of small business owners is hiring the least expensive contractor they can find, but this strategy tends to backfire in the long run. In an interview with JP Morgan Chase, Neva Peterson of Neva Knows Business, a bookkeeping and consulting business in Las Vegas, Nevada, shared why she invests heavily in the people that work for her, even if that has occasionally meant not paying herself.
“When I started hiring people, I would try to find the best person for the least amount of money,” Peterson said. “But then I would train them, and they would leave to make more money elsewhere. I’ve learned that I’m better off paying more than I think I can afford for a good person. They get off the ground faster, can bill more, and pay for themselves in the long run.”
However, if you need someone who can strategize and make judgment calls, it’s a good idea to hire based on quality rather than price. Consider hiring good talent that fits with the culture of your small business. It’s not always easy to find, but the need for a unified team is crucial for small businesses where people work closely together.
Some small business owners cling to every task, large or small, believing nobody can do it better than themselves. But to grow, you need to learn to delegate effectively.
Many entrepreneurs build their businesses with 80-hour work weeks, but it isn’t a sustainable pace forever. If handing work down is a challenge, follow this simple three-step plan:
If you have a hard time letting go, it’s okay to start small and work your way up as you build trust with your contractors.
As a small business owner, you can’t possibly keep up on ever-changing accounting and tax rules. Nor should you try – your time is better spent doing what you do best – focusing on the products and service that are the core of your business. That’s why having a healthy relationship with your financial advisor and accountant is imperative.
Check in on a regular basis – not just at tax time – so any challenges or opportunities can be discussed immediately. If you’re worried about getting charged for every phone call, ask about value-pricing.
Many accounting firms are moving away from billable hours and packaging their services in a way that provides better value to clients—and encourages them to have a more mutually beneficial relationship.
Many small business owners think they can’t afford a financial expert service, but consider how much time you spend on writing a business plan, monthly bookkeeping, preparing tax returns and making financial decisions for your business. Is that really a good use of your time?
Hiring one will likely cost less per hour than you would pay yourself. And you’ll not only free up extra time that can be better spent generating revenue, but you’ll gain peace of mind knowing that an expert is taking care of the details.
If you’re only talking to these experts tax time, you’re missing a huge opportunity!
One or two of these habits alone may not seem like much, but together, they can wreak havoc on your company’s ability to be profitable. The more proactive you are in identifying these habits and the more determined you are to eliminate them, the better chance you’ll have of leading your business into exponential growth.