By Elijah Odhiambo
A couple of times people wonder why their businesses are not flourishing. In some instances, the business owners incur huge losses and oftentimes forced to close down their businesses.
Have you ever wondered why most businesses fail?
Well, here are the top five most important business tips to note and to avoid for your business to blossom.
- Giving out debts
One of the most disastrous things that can lead to the fall of a business enterprise is continuous giving out of debts. Debts reduce cash flow in the business, drains the business owner off money and in extreme cases run you cashless and eventual shutdown.
A business operator should avoid giving out debts at all costs. One should always ensure that only cash, bank or M-Pesa payment modes are accepted in their businesses, purchases for later payments is and should always be a No. Never include friends who always want to be given business goods or services for free.
Why less debt?
Too much debt can increase the risk of default or even bankruptcy. It is advisable to adopt operating and financial leverages to better understand the amount of debt a business can afford to withstand.
- Frequently closing your business for unnecessary reasons.
Many investors, especially small scale business operators have the tendency of closing their businesses on random days to attend to unnecessary personal engagements. This is a serious virus that kills many business as it affects customer engagements. It scares off loyal customers who might have planned to make purchases on the same day the business might have been closed.
This, makes the investor lose customers to the competing brand in the market.
There are some personal engagements that can be avoided. Why should someone close his business to go and party? Is it necessary to close your business to for a rally? Making informed business choices and decisions is a huge asset to the growth of a business.
Closing businesses unnecessarily should be avoided like plaque.
- Buying personal assets with business money
You should never use the money set aside for business to purchase household equipment. Understanding that business money is specifically meant for business is crucial.
Inasmuch as having the financial discipline to guide on how to use business money is hard, there is no choice but let business money be that.
Using money meant for business to perform other house duties render the business cashless and also eats into the business profit.
One can never know whether a business makes profits or losses if he constantly uses part of the money to make unnecessary purchases.
- Setting wrong prices.
With the lust to make more money and become rich quickly, some business operators charge unimaginable prices for their goods and services, a decision that scares away customers.
Investors should never take advantage of customers by overpricing. Prices for commodities should be favourable and fair for all the customers.
Undercharging on the other hand should also be avoided. Avoid customers that always want to pay less for more. Friendly relations and business should never marry for any business to prosper.
- Neglecting online marketing.
One platform that a business person should never take for granted is the growing impact of the internet on marketing.
The world is going digital and almost all business are taking that digital perspective to market a variety of their goods and services. Businesses should as a result take note of the immensely growing demand for online marketing to sell, market and even retain customers. Being in contact with customers has been made easier. Form Facebook business pages, Whatsapp groups, zoom meetings, Twitter spaces, Instagram posts among others to gain customers.
Never take the internet for granted, the future is digital.