As we approach a new year, it is the ideal time to analyse what is currently going well with your business and, more crucially, what could be improved. Being brutally honest with yourself by picking apart your past business decisions and working out whether they were sensible or not is one of the best ways to learn.
As a business owner, you are constantly adapting your approach, having new experiences, and learning new skills. It is an endless journey of self-reflection, self-reliance, and the ability to evolve both yourself and your business.
Not only must you look back on what went well and what could be improved, but you must actively learn from more experienced entrepreneurs who have already gone through similar experiences and can warn others about pitfalls to avoid.
Many of these common mistakes involve fundamental elements of business that any company owner can relate to. This includes neglecting the health of the cash flow within your business, for example.
Others are more in tune with contemporary events – such as the cost of living crisis and recession.
Here are three business mistakes to avoid in 2023.
Neglect cash flow
One of the most fundamental mistakes that many business owners make from time to time is to neglect the cash flow within their company.
As the name suggests, cash flow is the flow of money coming into your enterprise at any one time – usually from your customers. This cash should then flow like a river through your business, paying your bills and, hopefully, paying your salary too.
However, this cash flow is often disrupted for one reason or another. Perhaps your client fails to pay on time, there is a recession, and your customer base dries up, or there is a freak event like a pandemic that threatens to derail your industry.
Whatever the case, while you may not be in control of the reason for inconsistent cash flow, you can certainly smooth it over. For example, why not use invoice financing through brokers like fundinvoice.co.uk? This financial solution helps your cash flow remain strong, even when payments are made late.
Fail to account for rising living costs
As many western nations start to suffer from the cost of living crisis, whether due to rampant inflation, the war in Ukraine, Brexit, or the financial ramifications of COVID-19, there is simply less money sloshing around in the system.
This means that consumers have less money to spend and that businesses themselves are struggling to continue with the same suppliers or even to keep the lights on.
It would be a mistake to avoid this obvious change in the economy. Many companies are finding it more expensive to pay for basic amenities like water, electricity, and gas, which has a knock-on effect on supply lines.
Although every situation is different, you should look into securing cheaper deals with overhead bills and your suppliers while remaining vigilant to shifting market trends.
Reduce your marketing spend
When tough times hit the economy, the natural reaction for most businesses is to reduce their spending across the board.
When it comes to marketing, this may prove a mistake. When most businesses are cutting back their marketing budgets (just at a time when they need new customers the most), you need to stand out by investing in your marketing. This will help you solidify your market position and attract new customers as a result.