10 Common Business Mistakes

Manoj Tiwari , Indian Cricketer also known as “Chota Dada” in Bengal.He made headlines by scoring 796 runs in the 2006-07 Ranji season and that too at an average that was equal to Sir Don Bradman (99.50). In 2008 when India lost to Australia, Dhooni was the captain,Sourav Ganguly and Rahul Dravid were dropped from the team. Manoj Tiwari was just 20 years old when he was selected in the team along with other players.

So what happened ,why Manoj was not able to make it big in Indian cricket. He was talented but could not capitalize the opportunities. These days competition in cricket is so fierce that even if you miss one match there are many players waiting on the bench. Fitness and consistent performance along with luck plays a major role.

Business is similar to sports in many ways. Sometimes we feel that we are on the right track and doing everything right but still we are not growing, business is stagnant or degrowing.

Sometimes we are so busy in running the race that we forget to reassess the strategy. 

During my three decades of sales and marketing experience , I have observed that the most common business mistakes are:

1. Vision – absence of vision is one the most common mistakes that most businesses make. It’s like sailing in the sea and not knowing which port to sail. Vision is like a simple statement that gives direction to business. (A detailed note on vision.)

2. Born with Silver spoon: Some of the entrepreneurs are second or third generation, the founders work hard to establish the business. Most of the time the next generation takes this success for granted and doesn’t spend time in learning the basics. They struggle in the process.

3. Basics – one of my friends told me a very interesting incident of Novak Djokovic appointing Boris Becker as head coach but still his ranking dropped many notches. He had to return to his old coach and the coach instructed him to focus on basics. This helped him regain his leadership position. Many times we forget the customer and start taking him for granted. Not keeping ears to ground and ignoring customers can really erode the business in a big way. The effect is not immediately visible but slowly eating up your business.

4. Team Building – An important aspect of any business but generally the most ignored one. If you want to grow you can’t grow without a dependable team. Build a team that can help you grow, decentralize work so that you can focus on bigger issues, invest in people. 

5.Trust – Agreed that every business has some trade secrets and can’t be shared with everyone, not investing in relationships and trust leads to stagnant business and high attrition of a team.  

6.Financial Management – Finance is the lifeline of any business and most of the businesses that I have seen struggling is not because of less finance but because of bad financial management. They don’t focus on the concept of ROI or ROCE but believe in the traditional concept of %age profit on each invoice. They take shortcuts to achieve short term objectives whereas business needs both tactical and strategic moves. 

7. Investment in developing goodwill /Brand Building – Growth in sales does not mean that your good will or the brand value is also growing. Many businesses mix these two things and live in a myth that they have become a brand. Whereas brand building is a process and lots of effort goes into it. 

8.Inventory Management – Another game changer, many a times this is like bad financial management. Not able to forecast demand and taking decisions based on poor feedback are some of the reasons that I have felt people get stuck in inventory.

9. Investment in technology – With changing market landscape I have seen many businesses adopting old obsolete methods to operate. Upgrading is a part of the process of growing up. These days lots of low cost tools are available that help in inventory management , outstanding management , team management and customer management and trend studying. 

10. Customer Profiling – All customers are not profitable , Generally I have seen people not being able to differentiate between a profitable and non profitable customer. Will suggest to divide the customers into four broad categories:

High Volume – Low Profit

High Volume – High Profit

Low Volume – Low Profit

Low Volume – High Profit

The need is to select from these four categories and base your decision on the objective.