The Five Biggest Mistakes Small Businesses Make

                All too often, a business starts with a great idea, a head of steam, and a “Ready, Shoot, Aim” mentality. In today’s business arena, where many companies are not managing their growth in a successful manner, we at Fleetway Capital want to offer you a few tips to consider as we approach the New Year:

1.       Undercapitalized

A good business plan will define a company’s efforts for managing working capital during the “Introduction” stage of a company’s life cycle. Unfortunately, as many small businesses evolve into their “Growth” and “Maturity” stages comprehensive analytical controls over assets and liabilities begin to take a backseat to initiatives in the operational spectrum.

                It is at this point, with accounting can bring a company off track and into financial hard times. A startup is expected to maintain at least 1 year’s worth of assets available until it begins to generate revenue. As the company reaches its growth period, it is important that the measures be taken to continue to maintain more assets than liabilities available.  Doing so will show financers that the company is in a position to grow. It is also a strong indicator that the company’s internal processes are efficient.

2.       Poor Record Keeping

Internal accounting is a guaranteed method for measuring a company’s strengths and weaknesses. Remember, when looking at accounting for managerial purpose, the most important factors to consider are the timeliness, relevance, and quality.  Manager should always be analyzing these numbers. More importantly, a smart manager should be considering the how they came about.

Do your numbers show variances that don’t fit your growth model? Where did they come from? Are they sustainable? If the results your accounting records show cannot answer these questions, it is time to evaluate why you are keeping them in the first place.

3.       Mismanagement Of Cash

Remember, cash is and will always be king. A good business always maintains enough liquidity to account for the unforeseen. Whether it is in the form of inventory or repairs, companies must account for what may happen.

Create metrics for measuring what impromptu costs have occurred in the past, what sector of the business produced them, and what the variability of such costs is moving forward. Also, think progressively. Assess what can be done to control your variable costs and manage them. This will free up more cash to handle those fixed costs, prepare for future unforeseeable ones, and increase your net working capital going forward.

4.       Lack of Control over Inventory

Managing a business reliant on turning over inventory can get out hand quickly. The biggest problem most businesses run into is overbuying in preparation for a boom that can only be rationalized as a hunch.

Knowing the macro and microeconomics surrounding your industry is the first step. Statistics are available from so many sources around the internet. Take the time to know your competition, but also understand how the complexities of the economy at large will affect you. Most importantly, adjust accordingly.

Adopt from the systems that have been successful in the past. Look to the companies whose philosophies you personally admire, and to the trendsetters in your industry. How can what they have done or are doing work for you? How have companies adjusted their purchasing habits to reflect changes to the times and to their businesses?

Finally, embrace technology. There are fantastic Business Intelligence tools out there to take much of the guesswork out of the equation for you. Research which ones can help you, and the return on investment they can offer.

5.       Not Recognizing Your Market

A good idea should always be followed up with the question, “But who needs this?” As companies grow and expand, many forget to consider their customer’s needs, in favor of what they want to sell to their customers. Start each year off with a plan as to how your market has grown, what direction it has grown in, and what you want to do to reach them. A good marketing plan and the corresponding action plans will set the tone for this. DO NOT STRAY FROM IT! Equipment and services are subject to evolution and change. Business is chaos. The market or segment of the market will not change rapidly. There is a good reason why you have targeted them. Now get out there and make them know your name.

                Join us monthly, where we will continue to explore the issues that affect your business. Also, take a look at our website, Fleetway Capital, for more information about our equipment leasing and vehicle leasing options and see how they can help your business.

Fleetway’s Movement into Social Media

As the world pushes forward with new technological advancements, and new ways of doing business, Fleetway Capital wants to ensure that we are advancing too.

Social media, such as Facebook and Twitter occupy 22% of all time spent online. This represents an excellent opportunity for us to work together with our vendors to reach out to the more than 150 million U.S. users of these websites each day, gaining their trust, but more importantly, their business.

Our relationships with our trusted vendors are what will make this a success. By pairing their top notch products with our world class financing options, Fleetway Capital can deliver more products and financing options to more clients than ever before possible.

Are you uncertain that your industry can benefit from social media? Key an eye on future blog posts that can help you navigate through the social network and utilize our knowledge for your financing needs.

Visit us at the Fleetway Capital website for more information about us and find out how we can help make your dreams a reality.