Three common SMB pitfalls and how to avoid them - Deloitte Private blog | Deloitte Australia has been added to Bookmarks.
Through our partnership with AusIndustry to deliver the Australian Government’s Entrepreneurs’ Programme, we have worked with over 1500 SMBs since 2015 via a network of skilled business advisors and facilitators operating around the country.
Below are three common pitfalls as well as some tips and tricks on how to avoid them.
1. No clearly defined strategic plan
It can be very easy for prospective SMB owners to fall into the trap of thinking their passion, enthusiasm and natural creativity will translate directly to business success. While these elements are crucial ingredients, in isolation they are not enough to drive a business through the start-up phase. SMB owners must have a clearly defined, long term plan outlining where they want to get to and how they’re going to get there.
Start with the end in mind: Formulating a business plan can be overwhelming, so it’s best to start with your long term objective and goals. Ask yourself what you would love to ultimately achieve, then work backwards and plan the more intricate steps to get there.
Plans can change: Don’t shy away from formulating a plan because you think it will lock you in to a certain approach. Plans evolve so you can certainly adapt your business and innovate over the course of its life. In the early stages, however, they’re imperative – a plan that clearly outlines your long term goals will give you a ‘guiding light’ when making the myriad of decisions that SMB owners must make.
2. The 6 P’s
Always remember – prior planning and preparation prevents poor performance. You can’t make an informed plan before conducting a rigorous, in depth analysis of the business environment you are about to enter. Knowing the intricacies of the market will ensure you target your efforts at opportunities with the most value add potential.
Know your competition: It’s crucial you have deep insight into the current competitive landscape of the industry you’re entering. Who are the key market players? How long have they been dominant? Are they looking to grow aggressively? Answering questions like these may save you from exerting considerable effort trying to tap into a certain market that’s already saturated by larger competitors. In saying this, don’t just hone your focus on a competitor’s strengths - spend just as much time researching their weaknesses, as it’s this that will be the golden key to unlock your competitive advantage.
Know your customer: Understanding your target market is just as vital as understanding your competition. SMB’s today need an unwavering focus on what customers they want to attract – in such a competitive environment, it’s no longer enough to cast a wide net and hope for the best. Customers want to feel special so consider conducting research on their preferences and buying behaviour, and tailor your offering and marketing efforts accordingly.
3. Being too afraid to say no
As an SMB owner, it’s very easy to fall into the trap of taking on as much as possible, and saying yes to every opportunity that comes through the door. Instead, try to focus on quality over quantity during your early stages.
Define your priorities: As an SMB owner, it is likely that you will have a set of objectives and goals for yourself and your business. Take the time to define your priorities and values – you will use these to guide future decision making and help decide which opportunities to accept or decline.
Know when to say no: When faced with a decision or opportunity, ask yourself whether it will help you reach the end goal you outlined in your strategic plan. If the answer is no - say no. Reluctance to say no can lead you to take on too much, cause general burnout or a lose focus on your value proposition.