5 costly mistakes trades people make and 3 simple steps to improve.
29th Oct '20 • By Jacob Banks
Find out the 5 costly mistakes trades people are making and 3 simple steps to improve.
Here's how your business can avoid unnecessary, costly mistakes.
1. Not Staying Current on Regulations or Insurance
Staying up to date on insurance policies seems like an unnecessary burden but when circumstances change and a claim is made against your business, you will be extremely grateful that you took the time to insure against it.
Almost 85 per cent of small/medium business owners think they are fully insured but around half don’t have adequate cover after a claim is made against their business, according to insurance experts.
The recent spate of natural disasters has thrown fresh light on the issue of under-insurance for businesses, with industry sources estimating up to 80 per cent of businesses are at least 10 per cent under-insured.
According to ICA up to 70 per cent of businesses are not insured or not fully insured, although this figure could be as high as 80 per cent and it’s been this way for many years.
According to In Your Trust Financial Planning “a lot of trades believe they have adequate income protection, but many policies are insufficient.”
95 per cent of Australian families do not have adequate levels of insurance.
It is prudent that every business owner reads the terms and conditions of their insurance policy. During the Queensland floods some companies realised that they hadn’t read the fine print and so didn’t have the correct amount of cover.
It is always better to have insurance as it provides peace of mind but you must clearly understand what you are covered for.
2. Not Taking Advantage of the Internet
The Australian market is changing rapidly and everyone can see a major shift in buying behaviour. Businesses, clients and consumers are buying products and services online because it saves time. With 7 out of 10 Australian’s logging onto the Internet every day, not enough businesses are represented on the Internet. It is now a necessity to have either a website or representation on search engines such as Google.
Research conducted by MYOB has found that only 35 per cent businesses have an online presence.
62 percent use internet banking for their business.
37 percent pay their bills on suppliers’ websites.
57 percent of business owners believe the internet is critical for marketing and promotion.
Nearly 44 per cent agree that they would sell more and get more work if they used the internet more effectively to market their business.
95 per cent of searches are carried out on Google.
65 per cent of businesses are being forgotten because they don’t have any electronic presence.
Almost 70 per cent of Australian people use the internet every day.
55 per cent of consumers are using rate and review sites before making a buying decision.
The online economy is booming every year and it is only set to continue for years to come. Those that are not representing their business online are losing out on massive returns.
The latest findings by Macquarie Equities Research confirmed that 18 per cent of shopping Centre visitors are only there to check out prices and sizes before going home to complete the purchase online.
3. Paying Too Much for Ineffective Advertising
These days businesses are looking for new ways to reach potential customers. Business owners are inundated with different marketing channels; TV, Radio, Newspaper, Magazine, Google, Directories, Social Media, Bing and Yahoo. The only growing industry is the online market place and it is booming while others are cutting back. Most big companies are shifting their focus to online advertising mediums.
Newspaper readership is declining due to free online news websites that provide up to date news bulletins. The content covered in printed newspaper mediums is usually at least 24 hours behind on its information.
TV adverts are not being viewed as shows or films can be recorded and customers can fast forward through the commercials. Another important trend is that internet users are downloading with increasing regularity.
Radio doesn’t fare much better due to the emergence and dominance of the Ipod/Iphone etc. You can easily choose your own play list and download any song at the touch of a button.
Most major magazines are adopting a download feature so customers can view their favourite magazine on a tablet.
Google advertising is booming and it is evident by looking at their share price (NASDAQ:GOOG). While the global economy has imploded, Google earnings have increased and are performing incredibly well. If your business isn’t represented on Google and you aren’t using Google ad words, then your business is missing out and will eventually face serious challenges.
4. Not Staying Organized or Buying the Wrong Materials
If a company isn’t efficient and has inadequate procedures in place, then it is very easy to make a mistake that will cost the company precious time and wasted wages. The Staff you hire are fundamental to the overall project. It is important to check each CV carefully and only hire employees with up to date references.
If you are not organized and don’t have concise business planning you will hinder your valuable business reputation.
Many Small businesses fail because they are not organized and have poor communication channels. Companies must have regular meetings and must be clear on their daily goals. Synchronicity and a positive morale will improve the quality and speed of the project.
Buying the correct materials is also fundamental to the cost of the project. If the company orders the wrong materials for your job, staff wages have to be paid while waiting for the new order. Also, the job will take longer to finish and you risk burning a bridge with your client. Referrals are pivotal to every business so it is important to take time to plan the job and begin once all your procedures are complete.
Try getting a discount for bulk orders.
5. Not Standing out From the Competition
Yankelovich, a market research firm, estimates that a person living in a city 30 years ago saw up to 2,000 ad messages a day, compared with up to 5,000 today. Your company must have a memorable slogan or campaign if it is to stand out from around 5,000 other marketing messages each person is subjected to everyday.
Make sure you are clear on the outcome of your campaign. It is great if people are talking about your advert but only if they remember the company behind it. What is the action you want your customer to take after seeing your advert?
Make sure you are driving traffic to your business. There are many ways to do this but online advertising is the most cost effective method in today’s world. Customers are using Google to actively search for a product or service. Your business must have a website or online presence in a business directory. Your website must be optimized using SEO and Google ad words. Think of your business as a billboard. You would rather have your billboard on a busy highway than on a desert road, right?
If you don’t advertise you are not keeping your customers informed about your new products or services and therefore giving your competition a chance to attract them.
If you don’t advertise your business you are not only losing new customers but also being forgotten by your current ones.
If you’re a small company, people outside your circle don't know you exist unless you advertise. If you advertise and put your products/services out there as much as possible, then you will stay a step ahead of your competition. The most successful companies in the world spend the most on advertising.
Try cross promotions with other companies and get goods or services at a discount as an offer to your customers. In return you can offer a discount voucher to their customers and therefore market your business to trusted affiliates.
3 Simple Steps to Improve
1. Optimize Your Internet Presence
Approximately 3 million searches include local keywords and phrases every month. Potential customers are looking for local businesses on Google every day and increasing on their smartphones. The internet helps bridge the gap between yourself and your customer. Further, you can showcase your products and services throughout Australia at the touch of a button.
Make your services visible to potential consumers by using the search engines. The quickest way to be found on Google is Google ad words. Setting up a Google ad words campaign can be a daunting experience, so seek advice. Your website needs Search Engine Optimised (SEO) so that Google can recognise your site and index it accordingly.
To maximise your Google rating, your website needs to be filled with relevant and unique content, this means no copy and pasting! Also, the more websites your business is exposed on, the better your Google ranking will be. Directories are a good way to increase your Google ranking and increase your customer reach.
If you don’t have a website, not to worry, joining directories works as a one page mini website within their directory. The more specific the directory is to your business the better. Find a directory with fewer listings so your business will stand out and therefore get more bang for your buck.
Use social media. Facebook, Twitter, Instagram have immense importance. Directories can easily link your social media pages to your business profile page. Get people to like your business and then market to everyone as much as you like for FREE.
Use rate and review sites so you can build your reputation. 55 per cent of customers are using rate and review sites before making a buying decision. Tripadvisor.com is the number 1 travel site in the world, as people trust the independent reviews before making a decision. Companies are rated on quality and not just price.
2. Maximize Advertising Effectiveness
Make sure you track the amount of leads you generate from each advertising medium. The Internet is definitely the best and cheapest way to promote your business but it ultimately depends on your type of business. Try different methods and track your results.
Your goal is to find the cheapest price per lead.
Hire a company to build a marketing campaign. Consumers take action by using proven strategies. Customers do more to avoid pain than they do to get pleasure.
Have a memorable slogan, catchy business name and a logo.
Have a promotion or special deal.
If you want to grow your business, you need to advertise as much as possible. The more people see your business, the more likely they are to use your service or buy from you. Track the effectiveness of each strategy. It will take time to do this but the results over the long run will be worth the effort. Constantly optimize.
3. Learn to Delegate and Seek Advice from Experts
Business owners should focus on their own expertise. Business owners too often try to do everything themselves and therefore are not focusing on their own skill which is the way they make their money. They should focus on their own skills and hire experts to work on the areas they lack knowledge in.
Hire a company to build an Internet site, SEO management, optimize your Google ad word campaign, improve your Google ranking and come up with an imaginative marketing strategy.
An expert will be far quicker when carrying out the task. It will set you back a little at the beginning but it will save your business a lot of money and stress in the long run.
Minimize your stress levels and go with the experts. Not only does hiring an expert reduce stress it can also be cost effective as your return on investment will be greater than the initial cost. Some sites even offer a three month guarantee, for example, Service.com.au.
There are many challenges while running your own business and many different aspects to think about. Business owners make the same common mistakes so try and avoid them or you will suffer. It is much better to spend a little to get the right assistance than do everything yourself and do it poorly. Studies show that businesses who advertise perform better than those who do not. With 7 out of 10 Australian’s logging onto the Internet every day and 95 per cent of searches carried out on Google, it makes sense to advertise online.
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