Only 80% of SME’s Have Made Costly Mistakes

Only 80% of SME’s Have Made Costly Mistakes

That is what a recent Xero survey said

And that, quite frankly, is crap.

Because I have never met a business owner that has not made a costly mistake. And I have touched over 4,000 businesses so I do base it on something.

Is it possible that I just happen to touch businesses owners that make costly mistakes? Unlikely. I think the 20% who said they hadn’t, are simply lying.

I know I have made a ton of mistakes. And I will continue to make a ton of them. So, if you have too, you are in good company.

But if you are new to the business game or even an established business there are a number of things I will tell you:

  1. Running a business in a stable environment is unstable. So, running one is an unstable environment can be a nightmare. One thing is true. Things are unstable, rocky and uncertain at the moment.
  2. About 3 in 5 of businesses will find finding staff challenging. There is shortage of good quality staff. Our advice to anyone opening a business or looking to scale a business is to look at the availability of staff in the industry. If it is a long-term issue it is going to cause problems which you will have to fill.
  3. There are a lot of business owners who are working for free or work for less money than they should. In the beginning that makes sense. But if you are still underpaying yourself after 5 years, something is wrong. Business owners generally pay everyone else and if anything is left over, pay themselves. My advice? Try to pay yourself first, then everyone else.
  4. We are happy to take on family, friends and people we know as business partners. Most regret this as after a while they find out that they are working with the wrong partners or suppliers as their core values are different.

The survey showed also found that:

  • 73% would if they could go back implement good financial management practices as a top priority. That I believe.
  • Many said they regretted not building a network of industry contacts.
  • 46 per cent regret not asking for help when struggling.
  • Over 80% wished they had a business advisor they could bounce ideas off.

There was also something which I was not expecting.

Xero’s research found it was tougher for younger generations to get into business ownership with Gen Z more likely to face negativity and discouragement from friends and family about starting their own business venture.

I do not know if that is because of social media were everyone must boast a million friends and show a life that does not exist in reality. If you then fail in business, you cannot pretend all is fantastic. Is the fear of failure too much for Gen Z to handle?

Or is it that starting a business is much harder due to competition, regulation and the need to finance business operations?

It’s probably a bit of both. Millennials don’t feel confident either which suggest changing attitudes to risk and starting a business.

But here are 2 tips that I was given about 12 years ago when I started WOW! Advisors and it came from my uncle who ran several failing businesses and then ran 1 super successful business. This is what he told me:

  1. Businesses have been around for thousands of years. Business does not change. The only thing that changes is how we conduct the business we do. If you look back and see businesses that have operated for 2 or 3 generations, they have adapted to conditions and changed the way the operate.
  2. You will never progress unless you are prepared to take risks. Sometimes we see businesses and business owners and think they were lucky or are clever or are smart. That may be true but, in most cases, they were prepared to take risks others were not. When it works out, we praise them. But when those who take risks fail, we scold them. And that is why I was told by my uncle to ignore what anyone is or would think about what I was doing.
I am not sure I have taken on board item 2 as much as I should. There is always fear amongst of us that stops driving us forward. But I take the view I am prepared to take risks to the point I am happy to live with the consequences if it goes wrong. Running a business efficiently, successfully and taking opportunities that come along your way is step 3 of our 9 steps to reduce working hours, give you daily money freedom and build wealth. If you would like time freedom, money freedom and information on how to build wealth contact us at hitesh@wowadvisors.com.au or call 07 3161 9548.