Many Small Scale Business owners have not been able to grow
their businesses beyond where they started.
After operating for many years, these businesses have continued to
behave like startups, the owners struggle to make ends meet and most of them
battle with heavy debts.
All the while, I have taken the time to study some businesses
and their owners around me to find out why they remain the same year in year
out. The result is eye opening. I am sure you will gain something that will
help you in your own business. Okay! Let’s
go.
They Spend the Money Before it Comes
One of them, a Caterer usually win big jobs but has not
moved a step from where she started 5 years ago. I have carefully monitored why she ends up
broke each time she completes a job and found out that she spends the project
money before doing the job.
As soon as she gets an advance payment for a job, she will
first of all hit the market; buy things she has been longing for without taking
into consideration how much it will cost her to complete the job. She will then be left with little or nothing
to execute the job; she will resort to getting the items to be used on
credit. This means that she will get the
items costlier than it would have been paying cash.
It also means that she will not be able to get all she needed
to deliver a satisfactory job to her customer.
What happens is that the not satisfied customer never comes back again.
To run your business well and make profit, you need to give
quality and satisfactory services to your customers by giving them what they
want. You must never count your chickens
before they are hatched. For continuity,
take care of your business needs first before pleasure.
They Underestimate Jobs
This Caterer has no permanent customer. This is because her dealings with them never
ended without a fight. In desperate moves
to win a job, she will undervalue the job only to come back to ask for
adjustment. When this is refused as it must,
she will only deliver a bad job. This is not good for any business and can kill
it permanently.
Before you give an estimate for a job to a customer, make
thorough enquiry on the current market prices of all the items you will need, add
a little mark-up to cover for any time that could be wasted before the job is
finally gotten and then a reasonable percentage as profit. If you cannot do this calculation well, get someone
who can do it for you to avoid going back and front with your customers.
They Engage in Wasteful Spending
I discovered that these business owners especially the
female ones always engage in activities that drain up their business capital
before they know it. An example of such
activities is Partying. This requires
them to buy Cloths (Aso Ebi) jewelries, shoes and bags every other week.
In a bid to meet up or be the best among others, some of
them use their business capital to sponsor this frivolity.
Please note that there are rules and procedures to follow if
you want to survive in any business notwithstanding how small it may be; you
must separate yourself from the business.
To achieve this, maintain a proper accounting system, place yourself on
a salary. Do not deep your hands into
your business capital to sponsor any project that will not bring profit to the
business.
They Have No Plan for Growth
Ninety Five percent of those I studied seem to have no plan
for expansion or growth. This is because
they run their businesses without business plan, no accounting system, no mission
or objective.
As the money comes in, it is spent in that same manner. They don’t do any kind of investment
whatsoever. Those who have access to
borrow money from Microfinance Banks do so with reckless abandon and weigh down
their businesses with heavy interests and unfavorable payment plans.
Set high goals for your business and aim to the sky. Many of the multinational businesses started
as little as yours. There is nothing wrong in growing a small business to an
enviable level.
Read also tips to run a successful personal business
Read also tips to run a successful personal business
Well let me stop here.
If this post made any sense to you, do not hesitate to let me know in
the comment box below.