This article is about two very common mistakes made by small businesses. The first is a sales mistake and the second is a marketing mistake…

Mistake One:

Many small businesses rely very heavily on one customer for the lion’s share of their sales. This is extremely common in the building industry for example. It could be said that this is just the 80/20 rule in action (i.e. we get 80% of our business from 20% of our customers), but here I am talking about something more than that. Businesses that make this mistake tend to rely almost entirely on just one customer. The result is that they build a very strong relationship with this one customer and in good times they make a lot of money, but if that customer implements staff or policy changes, or there is a general downturn in demand, (as happens in a recession) the small business in question can very easily find itself with little or no income. Even worse, if that main customer is late paying or unable to pay, the small business owner runs the risk of financial meltdown.

Mistake Two:

This mistake is probably even more common than the first one. Here I am talking about how you promote your small business, i.e. your marketing strategy. Perhaps you advertise in your local paper or Yellow Pages, or maybe you prefer to use good old-fashioned word-of-mouth. You probably do this because you find it effective at first and so you keep doing it. The problem comes from the misguided belief that this will provide all the sales you need and therefore you do it exclusively. Perhaps at times it will provide you with enough work, but again, as with the first mistake, if you rely solely on one method you are taking a huge risk. There are a huge range of different ways to market your business and you should always be looking for new ones. For more on this read my eBook, 101 Ways To Improve Your Small Business Marketing which is yours FREE when you sign up for our Newsletter.

I believe the primary reason for both of these mistakes is fear; fear of selling or promoting yourself. Many small business owners I have met have a fear of promoting themselves. Perhaps it’s because they lack conviction in their product/service quality or perhaps in their pricing, or maybe even in their own customer service, but most likely it’s because they lack belief in themselves.

That self-belief and therefore belief in your own business comes from four things:

1. Being passionate about what you do.
2. Sufficient training (formal training, training from experience, or both).
3. Trusting yourself to make decisions.
4. Taking the time to sit down and carefully plan out every aspect of your business; marketing, finance, admin, production, sales, purchasing, accounting and so on.

Once you have that self-belief you will not only take the view that you need a larger portfolio of customers and more ways of marketing your business to reduce your risks, but you will actually take the actions necessary to implement change; change that will reduce your risks and increase your gains.