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8 Common Mistakes Small Businesses Make

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Balkhi


Growing a small business is no easy feat. Just when you think you have things figured out, something comes along and throws a wrench in your plans.

The key to success is anticipating these bumps in the road and planning how to overcome them.

There’s no denying that running a small business is hard work.

From managing finances and employees to keep up with the latest industry trends, there are many moving parts to juggle.

However, even the most well-intentioned small business owners can make mistakes that jeopardize their success.

In this post, we’ll share some of the most common mistakes small businesses make and offer tips for avoiding them.

By being proactive and staying aware of the potential hazards, you can keep your small business on the path to growth. Get reading!

1. Not hiring professionals for finance and legal aspects

One of the most common mistakes small businesses make is failing to properly manage their finances.

Without a clear understanding of where their money is coming from and going, it’s easy to overspend and fall into debt.

Closely related to this is failing to create a budget. A budget can help small business owners keep track of their spending, set aside money for unexpected expenses, and plan for future growth.

It’s critical to stay on top of your finances if you want your small business to succeed. But if you want to be really smart – hire professionals to manage your finances and legal work.

Many small business owners make the mistake of trying to handle their various financial statements themselves.

Or they download templates for the internet for important legal contracts. These actions are disasters in the making. Please work with legal and accounting professionals instead!

You don’t have to spend a great deal of money to work with professionals. You can easily find quality accountants and lawyers whom you can contract with. When you have a small business, you’ll need to invest a small sum of money every month. And this is worth it ensure peace of mind and make your business compliant with the law.

2. Not having a niche or specialty

Many small businesses try to be everything to everyone. They want to attract as many customers as possible, and so they cast a wide net.

The problem with this approach is that it’s difficult to stand out from the competition when don’t have a defined audience, brand, or goal.

It’s much easier (and more effective) to focus on a niche or specialty. When you’re known for being the best at one thing, customers will seek you out.

Think about it this way: when you need a specific product or service, do you go to the store with everything or the one that specializes in what you’re looking for?

Most likely, you’ll choose the latter. The same goes for customers of small businesses.

They want to work with a company that specializes in what they need, not one that’s trying to be a jack-of-all-trades.

If you want your small business to be successful, focus on a niche or specialty. Not only will you attract more customers, but you’ll also be able to charge premium prices for your services.

3. Not focusing on branding

Another mistake small businesses often make is not investing enough in branding. In today’s competitive marketplace, it’s essential to have a strong online presence and stand out from the competition.

Yet many small businesses don’t invest enough in their website or social media platforms, or they don’t have a clear marketing strategy. As a result, they miss out on opportunities to attract new customers and grow their business.

What does it mean to invest in branding?

For starters, consider one brand as an example of successful branding: Starbucks. There’s a reason why this company is so successful – the business is built on strong branding.

You’ve probably come across coffee shops that make better coffee than Starbucks does, but they don’t have the reach or recognition that compares to the retail coffee chain.

The difference is that Starbucks has built a strong brand identity that resonates with its customers.

When you invest in branding, you do more than create a logo, a set of colors, or a style guide. You create an emotional connection with your customers that goes beyond what you sell.

Investing in branding helps you build a strong, recognizable, and trusted business – all of which are essential for small businesses to succeed.

Not every small business owner is a marketing expert, but that doesn’t mean you can’t create a strong brand for your business.

There are plenty of ways to get help with branding, whether you hire a branding agency or work with a marketing consultant.

What’s important is that you recognize the importance of branding and invest the time and resources necessary to create a strong brand identity for your business.

4. Not making plans to scale up

Many small businesses get comfortable with their current level of success and don’t make plans to scale up.

They may be content with the number of customers they have and the amount of revenue they’re generating, so they don’t invest in growth.

However, if you want your small business to be successful long-term, you need to strive for growth continuously.

This doesn’t mean that you should aim to double your business overnight. But it does mean that you should always be thinking about ways to increase sales, expand your customer base, and grow your company.

Scaling up may seem like a daunting task, but there are plenty of resources available to help you do it. Here are some ideas:

  • Join an accelerator program
  • Be part of a small business networking association – specifically one in your industry
  • Seek out mentors for advice
  • Get in touch with government agencies that support small businesses with advice, funding, and networking opportunities

If you want your small business to be successful, you need to make plans for growth and invest in strategies that will help you scale up. The next mistake that we look at in this post will give you ideas on how you can scale up.

5. Not reinvesting in the business

Many small businesses make the mistake of not reinvesting in their business. They may be profitable, but they don’t reinvest their profits back into the business.

Instead, they use the money to pay themselves or to finance other ventures.

However, if you want your small business to be successful, you need to reinvest your profits to grow your business and achieve long-term success.

  • There are many ways to reinvest in your business, such as:
  • Hiring new employees
  • Investing in marketing and advertising
  • Buying new equipment or upgrading your facilities
  • Improving your products or services

Such reinvestment doesn’t just affect your bottom line. It also boosts employee morale when they see that you have skin in the game and are working towards building a solid business.

6. Not diversifying your customer base

Another mistake that small businesses make is not diversifying their customer base. They may have a few loyal customers but don’t take the time to attract new ones.

As a result, they’re not growing their customer base, and they’re at risk of losing their existing customers.

If you want your small business to be successful, find specific groups of customers that need your products and services. This will help you reduce your reliance on any one customer and protect your business from the loss of a key customer.

There are many ways to diversify your customer base, such as:

  • Attracting new customers through marketing and advertising
  • Diversifying your product offerings
  • Creating a loyalty program
  • Use SEO and search listening tools like Ahrefs, AnswerThePublic, and more to help you find different target audiences

With the diversification of your customer base, you’ll create better products and marketing too. Your content will be personalized and will help more people find you, especially when you create content for each persona or target customer group.

7. Not investing in employee development

Many small businesses hire talented employees, but they don’t provide them with the training and development they need to be successful.

As a result, their employees cannot reach their full potential, and the company doesn’t get the most out of its investment.

If you want your small business to succeed, you must invest in employee development. This will help you attract and retain talented employees, and it will also help you maximize your investment in them.

There are many ways to invest in employee development, such as:

  • Providing training and development opportunities
  • Offering mentorship programs
  • Giving employees the opportunity to attend conferences and seminars
  • Investing in tools that employees need and want

Investing in employee development creates a better pool of workers for your business. They’ll be more likely to stay loyal and support your business.

8. Not having a succession plan

As uncomfortable as it may feel, it’s necessary to have a succession plan in place. This means planning for what will happen to the business if the owner dies or becomes incapacitated.

Because the death of a business owner can lead to the business may be sold or closed down. This affects many people, not the least the employees of the company.

It is important to have a succession plan in place. This will help you ensure the continuity of your business and protect your employees’ jobs.

There are many ways to create a succession plan, such as:

  • Creating a buy-sell agreement
  • Designating a successor
  • Creating an estate plan
  • Making your employees part owners of the business

A succession plan creates confidence and also ensures that things keep running, ensuring your business’s long-term success.

Protect your business by avoiding these mistakes

These are just a few of the mistakes small businesses can make that can jeopardize their success. By being mindful of these potential pitfalls, small business owners can make arrangements to deal with them.

With the right setups in place, you’ll be on your way to transforming your small business into a larger one – one that employees can rely on and one that reaches all your business goals.

Featured Image Credit: Photo by Blake Wisz; Unsplash; Thank you!

Syed Balkhi

Syed Balkhi is the founder of WPBeginner, the largest free WordPress resource site. With over 10 years of experience, he’s the leading WordPress expert in the industry.

Politics

Fintech Kennek raises $12.5M seed round to digitize lending

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Google eyed for $2 billion Anthropic deal after major Amazon play


London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.

According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.

The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:

“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”

The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:

“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”

The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.

The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.

Featured Image Credit: Photo from Kennek.io; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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Politics

Fortune 500’s race for generative AI breakthroughs

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Deanna Ritchie


As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.

Goldman Sachs’ Cautious Approach to Implementing Generative AI

In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.

According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.

One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.

To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.

Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.

Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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Politics

UK seizes web3 opportunity simplifying crypto regulations

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Deanna Ritchie


As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.

Streamlining Cryptocurrency Regulations for Innovation

To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.

The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.

Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.

The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.

Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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