The business world moves fast and as an entrepreneur, it’s critical to make decisions quickly. Unfortunately, the majority of businesses fail within the first few years. According to Forbes, 90% of startups will fail. In many cases, business failure is due to the owner waiting too long to make decisions. They often act in a reactive manner instead of a proactive one. While it is common to fail in business, that does not have to be your fate. Here are five of the most common small business decisions that are usually made too late.
1. Scaling Up
One of the problems that many entrepreneurs have is knowing when they need to scale up. They are selling the product well and things seem to be going fine, but they wait too long to pull the trigger on scaling their business up. Instead of hiring more employees or getting a bigger facility, they try to do things the way they’ve always done them. Although it is admirable to try and not rush into things too quickly, knowing when to scale things up a notch is critical. In many cases, you might be leaving a lot of money on the table if you don’t scale up in time. Another pitfall that comes with not scaling up quick enough is dissatisfied customers. If you don’t have enough employees to support your customer base, they may get upset quickly. At the same time, scaling up too quickly is the most common reason for businesses failing, so don’t do it before you’re ready.
2. Scaling Down
On the other end of the spectrum, sometimes you need to scale down. In fact, when it’s time to scale down, you’ll probably need to act quickly. In many businesses, something fundamental changes and the market isn’t the same as it was before. You can let that change in the market bankrupt you, or you can adapt and scale down. No one wants to be the bad guy and fire a bunch of employees. However, sometimes, it makes sense to cut some overhead and live to fight another day. It’ll be better to lose a few employees and stay in business than it will be to completely lose the business.
3. Not Buying Liability Insurance
As a business owner, you’re open to a great deal of liability. You never know what could happen through the course of running your business and having a sufficient amount of liability insurance is essential. Many business owners think they can put it off just a little longer. They try to save pennies on liability insurance premiums, and it ends up costing them a lot more in the long run. If someone is injured on your business property or some other disaster occurs, you could be looking at millions of dollars in damages. No one thinks it will happen to them until it does. Get liability insurance before you need it instead of after it’s too late.
4. Getting Rid of a Toxic Employee
Business owners often find themselves in a situation where they need to get rid of an employee but for some reason don’t pull the trigger. In some cases, this employee is bringing everyone down around them. They are hurting morale, making mistakes, and possibly causing fights between employees. Maybe this employee was once a friend or one of your earliest employees. It’s tough to fire employees like this, but in many cases, it’s better to just pull the bandage off now instead of delaying the inevitable. Toxic employees lead to many problems in every facet of your business. Instead of waiting until they give you no other choice, part ways with your toxic employee now.
5. Taking a Chance
Many business owners are risk-averse individuals. They took a risk initially to get things started and it worked out. When it comes to taking a chance beyond that, they stall. Maybe you’ve been putting off launching a new product or service. Maybe you think you should get into a new market with your products. Whatever it is, there’s a good chance that you know it’s the right decision, but you’re putting it off. Don’t put it off any longer. If it’s truly the right move, you’ll know it and be glad that you made the decision in the end.
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