Three Critical Mistakes Small Business Owners Often Make

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How important are small businesses to the U.S. economy? The answer is: very important. According to the U.S. Small Business Administration, small businesses have been responsible for generating 65% of new jobs since 1995. As Small Business points out, innovation is often a key part of the small business mindset; “small businesses tend to attract talent who invent new products or implement new solutions for existing ideas.”

If you run a small business, you want to be as successful as possible. The more profits you earn, the more money goes back not only to your employees, but the local economy as well. Not every business, though, is going to make it. According to data gathered by Statistic Brain, by their fifth year of operation, about 55% of startup businesses will have gone belly up. You don’t want that to be your business. What can you do to avoid this? Here are three critical mistakes that small business owners often make with their companies.

1. Lack of Data That Can Propel You Forward

Sometimes when people get into business, especially if it’s their first time, they can be a bit unrealistic about the experience. They’ll do what works for as long as it works, without worrying about the future. In reality, though, successful businesses rely on sales data to help them realize not only what items sell best, but when items sell, and how they should stock in an intelligent way for future sales. As Forbes points out, it’s also important for valuation purposes. “To sell for a high valuation, small business owners need reports that show sales by product or service and margins per customer, per location, per sales person.”

2. Adopting Superior Technology, Like Cloud Hosting

There’s a reason that a large number of businesses, both small and large, are now moving to cloud computing solutions. Did you know that approximately 60% of server workloads were virtualized in 2013? There are several advantages cloud offers. First, it allows businesses to expand at whatever pace feels comfortable. Having in-house hardware is expensive to invest in, and if you run out of space, your company can either experience growing pains or another costly technology investment. Cloud hosting services are paid incrementally, and companies only need to pay for as much space as they require — not more. Additionally, it’s a good time to invest, as cloud solution providers have been slashing prices for the past several years in a bid to gain loyal customers.

3. Not Placing Value in Loyal Employees

Unfortunately, many employers start to think of employees as expendable parts of a company machine. Not only is this inhumane, but it’s bad for business. According to a study by Bright Horizons, 89% of employees who report high levels of job satisfaction are more productive than their less content counterparts. It doesn’t always take a lot to make employees happy, and the results can pay off for your company’s bottom line.

How will you change your small business? Could cloud hosting help? Let us know in the comments. Continue reading here.

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