Just 14 per cent of founders at small companies believe they have a perfect record on decision making, as new research that reveals the most common small business mistakes made by Britain’s entrepreneurs.
The study, by consultancy firm Sandler Training, revealed that the most common mistake, cited by a third of respondents, was a failure to get their product or service right on its launch.
Almost a quarter admitted that the lack of a proper sales plan had the most negative impact on early growth, while 15 per cent missed the mark by setting their prices too low.
Over one in ten founders claimed that early recruitment was their biggest mistake, wishing they had kept their firm as a solo operation for longer. However, for the 69 per cent of owners that started their business alone, a third regretted not setting up with a business partner to share the burden of running a small company.
Seven in ten entreprenrus funded their new business, with a bill worth £24,150 for the first six months alone. As a result, cash flow was identified as the single biggest challenge for small business owners in the following years.
Poor cash flow can provoke a knock-on effect for a small business, such as loss of contracts and inability to make debt repayments or pay suppliers and staff.
Finding the resources to recruit staff was cited by 17 per cent of founders as their greatest challenge, while over one in ten struggled to find an appropriate work-life balance due to small business mistakes.
Commenting on the findings, Shaun Thomson, CEO of Sandler Training, said that the conception of an innovative product or service was just one piece of a “very complex puzzle”.
“Business growth is dependent on four pillars of; skills, structure, strategy and staff – knowledge of these is not innate and often the business founder lacks experience across many of these pillars, so mistakes are inevitable. The key is learning from these mistakes,” he said in a statement.
Thomson warned against complacency for small business owners enjoying success with their firm, adding that operations could always be improved.
“When it comes to successfully running a business there isn’t a status quo – they are either growing or dying. To ensure that they succeed, [owners] must document their mistakes and implement learning’s at every stage of the business journey” he concluded.
For established owners with three years of trading under their belt, the current small business mistakes holding back growth were spending time on tasks that could either be outsourced or delegated and the absence of target-setting.
A low level of trading was cited by over half of respondents as the reason their business had gone under. However, failure did not deter Britain’s ambitious entrepreneurs, with over a quarter having founded a business in the past.
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