It is often said that, learning from mistakes and knowing NOT to repeat them is a good sign for growth in life as a human being. However, does this hold true for conducting business as well? I surely think so. Conducting business is nothing but humans interacting on a commercial scale for purpose of gain. It involves the same faculties and in fact, it is sometimes considered legitimate to do business in a mercenary fashion, bereft of emotional values. Having said that, in business, it is a good idea to learn from others' mistakes and avoid repeating them at your expense. Here is how to learn from common mistakes.
While starting a business, think optimally, make a practical assessment of your target segment, assess your ability to service them efficiently and then calculate the scale of your business and investments accordingly. The size of your business should be as ideally suited to current circumstances as possible and have the potential for future growth. A very small or a very large-scale commencement, could upset medium to long-term sustainability and affect your reputation as a sound businessperson.
Depending on the nature of your business, maintain a sensible stock of inventory, raw materials, etc. Some businesses follow concepts such as ‘Just-in-time' inventory to optimize capitalization costs, see if this works for you. If you are in the services sector, maintaining a small and affordable bench strength will enable you to take on additional work and remain reliable to your customers.
Devote sufficient time to hire the right kind of employees. The "right kind" includes suitable qualifications, experience, the willingness to work and more importantly, someone who will complement your line of thinking and appreciate your work philosophy. Develop (if you already have not) a healthy appetite for criticisms and candid feedback from your employees - they may just be looking out for the welfare of the business. Likewise, know when to take difficult decisions, display leadership qualities and develop a team that will be proud of its leader. Remember to train yourself and your employees in all areas of work relating to your business and put in place a regular development and skill enhancement program. Include the staff on bench strength too.
Consider measures for accountability and instill a sense of ownership in your employees. It serves very well when your employees feel they belong and are proud of working in your establishment, no matter the nature of business you undertake. Simultaneously, remunerate them adequately and on time for services rendered. Plan ahead for lean seasons; maintain a rainy day account to cover for exigencies. Always have a Plan B for any situation.
For those in the in the services sector particularly, it is crucial to invoice on time and make all efforts to collect on time. Your clients will respect you. Maintain transparency in billing for costs and expenses incurred on materials and incidentals and if you have a mark-up, own up to it. Most clients only expect the truth and will not mind the markup. They will not like being taken for a ride; that's all.
At the end of this article, it is quite possible that you will feel you already know all of the above, so do check to see how often they are implemented. While all these ideas look good in the telling and reading, what is important, at the end of the day, is how successful you are in implementing sound business and ethical practices. The success and future of your business is guaranteed, once you take heed of these principles and put them into action.