Three Business Myths that Cost you Money

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It doesn’t just happen in the small business world. Egos, as well as old ideas that aren’t necessarily grounded in fact or experience permeate businesses large and small all over the world. They are the old wives’ tales of the corporate arena and if you operate with these old myths, you are likely to lose money, stagnate your growth, or as a worst case scenario, close the doors to your business.

Bigger is Better

You want to be the next big box retailer? Do you dream of having more locations or a larger fleet of service vehicles? With a bigger operation come more expenses. The larger your fleet of service vehicles, the more maintenance and insurance they require, the more employees you will need who require workers’ compensation insurance, more office staff to process the orders and invoices, and you’re under more pressure to keep the orders coming in to pay the larger overhead expenses.

Research also shows that gross margins don’t automatically expand as you grow. You might have won that lucrative government contract but did you have to rent more equipment in order to make a larger amount of product? Before expanding, make sure that the facts match the myth. Bigger isn’t always better once the numbers are crunched.

This is War

Sometimes it’s true. Your competitors may be secretly hoping that your business closes its doors tomorrow and they may be taking steps to undercut your prices, speak negatively about your service, and do everything in their power to make your business struggle.

Most likely, though, they don’t have time for that. In challenging economic times, they have their own business to tend to and what’s even more of a myth-buster, they may welcome a phone call from you. It’s far more likely that they are open to combining resources so the both of you can prosper. Smart business owners aren’t looking to sabotage you. They’re just looking to make money. If your market is large, it’s unlikely that one business can serve all of the demand anyway.

The Market Wants This

If you weren’t the boss and you had a theory about your business, a smart boss would tell you that he or she isn’t concerned with what you think. They want the facts. They want to see your research and it had better be complete, concise, and objective.

Do you hold the same standards for yourself? You may think you know what the market wants but is that still true? Do today’s teenagers have the same tastes as those of a generation ago? Is there new research on the market relating to your product? If you aren’t constantly doing market research, you’re falling behind. There can be no “I think” if you want to stay ahead of the market. Every decision you make should have data behind it. Did you ask the market what they were willing to pay for your product or service?

Don’t operate your business with these three myths. To see your business prosper means making rules and decisions based on today’s data. Not yesterday’s wives’ tales.