Managing a successful business is incredibly rewarding, but it takes careful planning, industry understanding and the awareness to avoid common missteps along the way.
There’s a reason the word “risky” is so often coupled with “business”. The Cambridge Dictionary defines “risky business” as something that involves risk or the chance of failure. In a commercial sense, every new venture will come with some form of risk.
Some risks — such as those posed by evolving commercial landscapes and fluctuating industry factors — can be difficult to prepare for. Others, however, can be avoided with careful planning at the early stages of your business journey.
Keep reading to discover six of the biggest business mistakes it pays to avoid in the early days.
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1. Not having a business plan
The old proverb — fail to prepare, and you’re preparing to fail — rings true. The biggest mistake new business owners make is not writing a business plan.
Starting a business is no small feat. There’s a lot of preparation work you’ll need to do, but having a business plan will help you hit the ground running as soon as possible. Taking the time to lay out your business’s mission, competitors, and key objectives, amongst other things, also gives you something to reference when the pace kicks up another gear.
Even if your business is an established entity, it pays to have one in place for a multitude of reasons. It can help forge your business direction, for example, giving you a clearer path towards the next level of growth. It can also give you greater control over your business by empowering you with a more thorough understanding of the different forces and factors that will sway your success, indicating areas for improvement and opportunity.
Follow the steps in our How to Write a Business Plan: A Step-by-Step Guide blog to get started.
2. Giving little thought to your tools
A trap that business owners fall victim to time and time again is selecting the wrong tools for the job. One of the most expensive missteps, when it comes to tooling, is choosing a merchant services provider with hidden fees — specifically, terminal rental fees.
What appears to be an affordable option on the surface may be weighed down by hidden fees.
When it comes to choosing an EFTPOS payment terminal, do your research and do it thoroughly. Hidden fees add up over time, and can cost your business far more than anticipated.
When comparing terminal options, make sure to also consider the cost of contract termination fees that could catch you out further down the track. If you can’t find them listed on the website, always confirm with the operator before signing on the dotted line. You’ll save yourself time and money in the long run.
We don’t believe in hidden charges or expensive monthly rental fees. That’s why Zeller Terminal is yours to keep for a one-off payment of $299.
3. Mis-naming your payment terminal
Something as simple as giving little thought to the name of your EFTPOS terminal could have costly consequences for your business down the line. This is because the terminal name will show up on your customers’ credit card statements, and if it doesn’t match the business name on their statement, it could earn ‘unrecognised transaction’ status, leading to increased chargeback requests.
Not only will this compromise your business’ credibility by creating confusion for your customers, but dealing with chargeback requests could chew into valuable time that could otherwise be spent managing and growing your business.
Has your business encountered recent customer chargebacks? Learn how to minimise them.
4. Not understanding your fees
As most SME owners can appreciate, every dollar counts when it comes to running a business. However, many still accept excessive bank account administration fees as ‘standard’ — simply because they don’t know any different. The reality is that there are countless ways and means of minimising these fees, the trick is knowing how.
Firstly, you should shop around for the best business account, comparing factors such as monthly account fees, rates and fees for processing, transaction and deposit limits, and card charges.
The next step is to understand the ways in which you can further minimise costs. This could include linking your accounts, bundling features and services, setting low-balance alerts, meeting minimum spend amounts, and exploring other perks that could provide future value to your or your business.
Business banking shouldn’t be expensive. In fact, there are even fee-free business accounts these days that can help keep more money in your back pocket.
5. Rejecting modern forms of payment
Some business owners are still under the impression that accepting more forms of payment creates more hassle — largely due to added processing fees and the need for additional hardware or software — when in reality it actually opens your business up to greater opportunities.
As more payment options become available, the way customers make purchases will continue to evolve. We’ve already experienced the shift away from hard currency and cheques to credit and debit cards, as well as the introduction of contactless payments and newer alternatives such as Alipay and Zip Pay. If businesses don’t support these developments by diversifying their payment offerings, they run the risk of losing sales and customers to businesses who have embraced modern methods of payment.
Possible consequences of not diversifying include losing existing customers who upgrade their payment preferences, losing out on new customers whose payment preferences don’t align with your offerings, stagnant cash flow due to reliance on fewer payment methods that may take days to settle, and higher overhead costs as a result of not adopting free or lower-cost options.
6. Being burdened by complicated technology
While it’s true that technology is indeed advancing, that doesn’t necessarily mean all modern technology is intuitive and easy to use. Take your payment terminal for example; precious time and money can be wasted on tedious tasks such as setup, installation, updates, wireless connectivity issues, and payment processing problems, if you choose a provider that has prioritised cost-cutting over functionality and ease of use.
To avoid wasting valuable resources, both in terms of time and money, ensure you research your options. Ideally, you’re after a payment system that is not only affordable but also intuitive, straightforward, and easy to install. And in a perfect world, every component of your payment system – terminal, software, accounts, and cards – operate seamlessly together, empowering you with a complete payments solution.
Suffice to say, business is a fast-moving beast and if you’re equipped with the know-how to navigate those early days when setup and management can seem overwhelming, you can avoid costly mistakes like the ones above. Which means you have everything to gain from staying informed about the commercial world.
You’ve already learned how to avoid common business blunders, now it’s simply a matter of building on that knowledge to help grow your own enterprise. Sign up to our Business Blog for more tips to maximise your business’ potential.
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