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Business Pitfalls to Avoid as a New Year Resolution for 2019
A couple of days have passed since we entered into the New Year 2019. You might have made resolutions like keeping your expenses in control, hitting the gym, spending more time with your family, etc. Besides these personal resolutions, what have you planned for your business in order to attain more success? After all, the resolution is all about bringing positive change in your life, so why not in business?
It’s the right time for businesses to set their goals and make New Year’s resolutions to thrive in 2019! The end of the year is always the best time to analyze your business performance as you have got all the required reports of the past year to create plans for the future.
Traditionally, New Year resolutions are made to be more positive and organized, but in the business sector, it’s about creating new strategies to achieve success and increase profits as compared to the previous year.
“Approach the New Year with resolve to find the opportunities hidden in each new day”- Michael Josephson- a former law professor and motivational speaker in the United States of America.
Don’t Set Failure for your Business and Avoid these Common Pitfalls to Outshine in 2019:
1. Devise a Plan for the Coming Year –
Well, many business owners don’t plan well, and that’s the reason they don’t have clear goals to achieve. According to a proverb, “A goal without a plan is just a wish.” Owners don’t take planning on a serious note as they find it time-consuming, then what happens next?
- Big mistakes– You can find yourself in a mess as you don’t know what your role is, what resources you require, what is the purpose of your partner – all these eventually leading to business failure.
- Over-emotional– Sometimes, you become so self-assured with the previous year performance that you neglect the reality entirely. Don’t become a dreamer instead turn your dream into reality!
- Nobody is on the same page– When you don’t plan strategically about the targets you set for your employees- this will take your business nowhere and can result in losses.
You decide to plan well with all the reports in hand depicting your business performance to avoid losses and stay focused on the key-driving factors.
2. Keep a Hawk-Eye on Expenses –
This is where small businesses often get stuck! You are ready with your plan and resources list, all set for an exciting New Year- What about your expenses? Being a business owner, if you didn’t do your groundwork for finances, then you’ll lose out to competitors.
When you don’t have an appropriate budget or financial forecast, you may encounter challenges like:
- Poor track of day-to-day expenses that eventually lead you to negative cash flow
- Don’t know how much and when to raise capital fund in the near future
- Not paid invoices on time or fail to get paid on time from vendors due to zero follow-ups
- Delaying bookkeeping functions to the next day and end up finding discrepancies in the financial statements
- Overburdened during tax season and making costlier errors, resulting in IRS penalties
Add this aspect to your priority list and make sure that in 2019, you will keep a hawk on your expenses. Always stay on the safer side by seeking various sources for credit as the urgency for money can arise at any time. Don’t forget to plan a budget as it will help you steer through the year.
3. Delegate More and Stay Focused on What Do You Best –
Businesses usually play the role of a manager, accountant, sales executive, administrators, etc. When you do multi-tasking, it eventually diverts your focus from your business goals and your passion of being your own boss.
What all you miss out?
- You don’t have enough time to interact with your clients
- You end up mixing your professional and personal life
- You may not be a pro in every subject, such as small business accounting, preparing tax returns, advertising, etc., and managing everything by yourself can result in big blunders.
- You cannot focus on your ideas or brainstorm to innovate your products/services
- You cannot do your research work if overburdened with tasks
Successful entrepreneurs always say that delegating your work can help you stay focused on the key factors. How? It is obvious that you cannot run your business by handling all the tasks yourself. At some point; you will require assistance or experts to guide you through the process.
Entrepreneurs can hire experts in-house for tasks like tax preparation and filings, accounting, and administrators to streamline their operations and focus on growth. But as we all know businesses usually have budget constraints and hiring experts for every task is not possible. In such a scenario, opting for outsourcing services can be an optimal solution to save on cost, time, and efforts.
4. Credit or Loan –
Businesses encounter many challenges, but limited funds top the chart. You might be wondering how this could be a challenge as there are so many banks and lending institutions that offer loans. But the fact is banks usually assist with a loan to businesses that are financially stable and have a good credit score because the risk is very less.
When business owners fail to gather the required capital or fund for their firm, it eventually impacts the cash flow of the business. How? You might be already spending an amount on running operations from your savings, but your business had not yet started earning so how will you maintain that efficiency in the workflow.
According to the recent survey by Biz2Credit Business Lending Index, approvals of loan applications from businesses has touched post-recession level up to 26.9% at big banks, while small banks have granted more than half of the loan requests from businesses in November 2018.
Economy is showing great strength to support businesses that are in search of capital funds. SBA loans usually come with government assurances against default that alleviates lender risk, thereby providing incentives for a financial institution that lend money to businesses that qualify loan term.
You can get your loan approved with these steps:
- Improve your business credit score-
Before starting your business, you should ensure that you have a good business credit score because, on the basis of your previous credit history, the SBA loan program lends money to businesses. And in case, if you haven’t taken any loan so far, you will be categorized under “unscorable” and may not get an approval.
- Don’t ignore your cash flow-
Applying for a loan always requires your cash flow to be positive because a lender verifies your cash flow to evaluate the risk. And if your cash flow is negative, the chances of risk automatically increases and so they don’t approve loans in such scenarios.
Considering that more the risk, more the chances of losing money, every lender wants their money back along with the interest. Try to keep a hawk eye on your payables and receivables to get loans at a better interest rate.
- Get the required documents-
Loan granting process can take a few weeks or months to get approved from banks. So to speed up the process, keep all your documents handy. Besides cash flow and business credit score, banks usually seek a bigger picture, which includes your business plan and tax returns of the past few years.
Financial institutions want to know where your business is heading and whether you have any outstanding liabilities.
5. Office Space –
Businesses often struggle to buy office space, but the demand to own office space is increasing every year along with the rental rates. However, there is a dearth of small office sale opportunities, which has ultimately restricted the options for business owners who are looking for opportunities to buy.
If you want to buy an office space under 10,000 square feet, begin your search right now as it might take an entire year to find the ideal space.
Choosing property lease over owning office-space or paying rents is a viable choice that businesses should make. In the case of the high-growth sector like accounting or insurance, businesses can outsource most of the tasks and control outgrowing of their available office space.
Thus, hiring a limited workforce or outsourcing is the best way to utilize the available space.
6. Lack of Skilled Resources for Businesses –
Well, this is a major problem among businesses in the US. Why is it challenging for businesses? According to experts, the reasons are:
- Jobs on offer
- Willpower to take an opportunity
- Attitude of the labor
- Not showing up on time
- Inability to pass the drug test
- Less salary
These reasons have given birth to an interesting situation in the business sector. There are currently 7 million jobs, but not many applicants are qualified enough to fill in the positions.
The good news is that the US government has started offering 20% deduction on the tax for businesses. Now owners can utilize this money to train their employees or hire the right talent for their business. Besides this, the best alternative is outsourcing services as it helps owners to get rid of the long tiring recruiting process, reduce operating costs, and give them more time to focus on their business growth.
No matter what resolutions you have, implementing and sticking to them is essential. And this is where a lot of entrepreneurs fail. But if you keep up to these resolutions over the year, you’ll not only feel stress-free, but you’ll also have more zeal and vigor to take your business to the next level and make it successful.
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