5 Mistakes SMEs Must Avoid
By Joseph Wong, General Counsel – MoolahSense
Singapore is a nation with a robust SME landscape contributing to more than half the GDP and comprises 70% of the Singapore workforce. This is proof that the pioneering spirit in the little Red Dot is astounding.
Although many success stories are sources of inspiration, nearly seven to eight companies for every ten new ones that are formed, don’t make it past their first-year anniversary according to the Singapore Department of Statistics. This makes it essential for every individual embarking on their SME journey to map any impending pitfalls ahead of them.
Here are five potentially crucial mistakes that can cripple your businesses and worse – your financial wellbeing:
Great Idea, No Plan
An idea is just the beginning. It is important to translate this idea into tangible, measurable goals. Whether your business is a product or a service, you need to focus on the vision and the mission of the business. The ability and the drive to execute the idea is necessary.
Get yourself equipped with a business plan. Understand the monetary implications and then proceed with a business that can see your idea come to life.
Once you have your plan in place, it is important to set yourself realistic expectations where revenue is concerned. Most small businesses are not profitable within their first year or two. So, expecting significant profits within the first year would set you up for disappointment.
In addition to a solid budget plan, it is very important for you to have sufficient savings, or a reliable source of income to sustain yourself during your start-up period.
To paraphrase Helmuth von Moltke, “no business plan survives contact with the market-place”. As you focus on expanding your business and increase revenue, unexpected situations can disrupt your progress.
Whether it’s an equipment failure, staff attrition or delayed payments from clients, it is in your best interest to have a healthy cash flow. So, ensure that you have enough moolah back up for all sorts of contingencies.
Doing it All
In the early days of your business, it’s perfectly natural to be involved in every aspect of the business. After all, the job descriptions in a small business are always grey since everyone pitches in to gets tasks done.
As your business grows, you need to delegate tasks to your employees and focus on the strategic direction for the business. Many business owners who are perfectionists might feel insecure while delegating. Rather than spreading yourself thin, make use of the several free productivity tools available online.
Document your business processes so that you can teach employees your way of doing things. Keep an open line of communication with them, so that if they make a mistake you can use it as a learning opportunity and keep the business moving.
As you expand your business, you will encounter several opportunities to collaborate and diversify. Being a recipient of such ideas underlines your success as an entrepreneur.
When considering such options, do focus on your customers first. Would this be something they need or want? If the proposal on the table aligns with your original business plan, make sure that you have the necessary resources to include this into your offering. If not, it would be better to park this temporarily.
At the end of the day, you have limited time and resources – stay focused on doing one thing and doing it better than anyone else, and your business will grow and thrive.
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