Manufacturing Company Business Mistakes
The six mistakes covered within this article are costly and painful and can destroy your manufacturing business. If you stop making them, you will have a more successful, enjoyable and profitable business.
Nearly 90% of small business failures are directly caused by lack of managerial expertise as determined by Dunn and Bradstreet, in their Business Failure Record. Despite having product knowledge (technical expertise) they lacked business expertise (entrepreneurial skills) and didn’t know how to properly run a business.
A very sobering statistic is that 80% of all small businesses will fail within the first 5 years of trading.
Most (small) business owners are losing a substantial amount of money by unwittingly making these business mistakes every day. Your business would be worth a lot more in value if you knew what you had to do in order to overcome these mistakes.
Costly Mistake #1 Failure to Plan
Start with the end in mind….
The most important document you produce as a business owner is your business plan. This should showcase what you intend to achieve during the next 12 months (or over another set period) and how you plan to do it.
To ensure everyone is working towards the same goal, your plan needs to be communicated to everyone in your business. One major reason SME businesses have a short life expectancy is poor planning or a complete lack of planning. Planning is not about what you will do in the future. It is about the future implications of present decisions and actions which is why we would always suggest a Marketing & Sales ACTION Plan is essential.
You are much more likely to achieve your objectives provided you make a start, so what’s stopping you from planning?
You must create the end in your mind before you can make it become reality.
The Benjamin Franklin quote “If you fail to plan then you plan to fail.” in my experience holds very true. So knowing this, why is it so many Directors and Managers in business seem to overlook this very important point?
Example: Consider the process of building a house;
You would not comprehend building a house until you had
- designed in precise detail exactly how the house would look
- identified where exactly where everything would be positioned
- the kitchen,
- the living area
- the bathroom,
- number of bedrooms etc.
- You would get a very clear sense of the kind of house you want, well before you even instruct the builders.
- You workout the process in your mind until you have very clear picture of what you want to build.
Once you had completed the above stage
- With the help of an architect (note you are using an expert) you would put the plan together and come up with plans of your dream!
- If you don’t plan carefully and rush through the early stages then you will incur a lot more additional changes during the building process.
- Therefore you must be absolutely sure the blueprint shows exactly what you want.
- When running a business most people don’t have a clear plan of the vision or path they wish to take, in order to achieve what they want from their business
- However the businesses mission is not clear and as a consequence neither are the results.
- Additionally, your team members won’t know where the business is heading and they won’t be clear on their role in the process. We have worked with small manufacturing companies with 5 Directors where every Director had a different vison of the direction the business was heading
- To help the business reach its targets employees need to know what they need to.
With a plan,
At any point in time, you are able to gauge how well you are doing and whether or not you are on course.
Can you imagine driving from Peterborough to Avebury (a place which I imagine you have never heard of or been to) which is approximately 150 miles away? Would you use a Sat Nav, your Smartphone or even a map to get to your destination or would you rely on sheer luck and get in your car and just drive.
If you have no idea where your going, they do say any road will get you there, so you may well drive. If you want to get to your destination as quickly and directly as possible then you would use the Sat Nav.
The issue of failing to plan
If you don’t know where you’re going then every road leads to your destination!
Just consider how confusing, costly and time consuming that would be. By planning your route so you and your team have laser focus on the path you are taking. The chance of getting lost is reduced and it’s relatively simple to get back on track if you stray for any reason.
So linking back to your business
- Without a clear business plan you may still get to where you want to get to but it will most definitely take you a lot longer and cost you a lot more
- Your business development will seem like a never-ending journey and most probably take you a lifetime.
- Have your goals written down, shared with your team and then lay out a clear action plan as to how you intend to follow your plan
- Ensure your team can commit to following that plan. Its no good having a plan if the Directors who are supposed to be delivering it are actually going in alternative directions
- With regular business reviews you’ll be able to make a few minor changes on your journey and carry out your plan in accordance with the goals and objectives you wanted.
- Robust and proper planning plays a critical role in the success of small businesses and should not be overlooked. A large part of setting goals is what it makes of you to accomplish them – small ordinary steps which enable you to get to your destination.
Steps to Improve Your Business Planning
- Write down your goals/plan
- Share them with your team
- Break them down with a timeline
- Review your goals/plan – monthly at the minimum
- Regularly monitor progress
- Continually improve on any shortfalls
#2 Lack of Marketing
Marketing is an “Expert” function (Just like the architect, accountant, solicitor etc)
Marketing is an expert function of your day to day operation yet it is so often, in my experience, overlooked and treated as “advertising and crayoning”
Over the last forty years most manufacturing business owners still don’t actually understand the process and importance of targeted marketing. I have lost count of the number of businesses I have visited and when I ask the question “Who is your target customer?” they say “Everyone”
Unfortunately you never know when, where, or how a new prospect is going to hear about your business.
If you are communicating numerous mixed messages prospects will have an unclear idea of what your business offering is and what you want a prospect to do or even worse.
Your company must present a consistent, clear message, on all fronts. As they say you will never get a second chance to make a first impression. Make sure every new prospect who sees your business for the first time receives the same (if not better), consistent message, positioning you as the solution to their needs.
Now an important point here is can you actually manufacture / consistently provide what you say you will. Its no good having great marketing if your quality is poor, your designs sub standard, your consistency sub standard.
Lets consider this in more detail
Imagine you were looking to buy a “conveyor system ” and you spoke to 3 people from the same company. For example lets say the Sales Engineer, Product Designer and the Technical Manager at various intervals. What if they all gave you different and worse still, contradicting information. Apart from being confused, you would start to doubt the authenticity of the message but also the ability of the “conveyor system manufacturer” to deliver what it says on the tin.
Don’t wave in the dark
If you’re not marketing properly then it’s a bit like waving in the dark, because you know you’re doing it but nobody else does!
The size of your budget is not the important factor; the key is how it’s used.
If you use it wisely whereby you’re inventive and creative then over time you’ll get noticed. In marketing there are no magic silver bullets. There are no quick or magic formula’s, it’s purely consistency coupled with testing what works for you.
I’m biased but in my view marketing is your investment in your future. Without customers you have no business and marketing is all about “customers” You plant a seed or two today in the realisation that you will reap the benefits in time to come.
Because you will be measuring all your marketing activities, when you identify if something works then keep repeating it. If an activity doesn’t work , establish why and if it can’t be improved stop doing it.
The only change I would make would be an improvement to the process because there’s always room for that. With the speed of change you need to move with the times because if you don’t you’ll be left behind. ( This is one of the reasons that we created Rapid Test Marketing) You’ll only know what works if you track & measure your results so it’s vital that you keep good records. You can repeat the investment which provides the best return in order to maximise your return on investment.
Fill-up your marketing funnel with lots of potential customers which should ideally be done via several different mediums. That way you capitalise on the target market because we’re all different and we are influenced by different forms of advertising.
Essential Marketing Actions
- Remember marketing is a professional skill and should only be practised by qualified practitioners (would you let a carpenter service your gas fire)
- Set a marketing budget
- Fix a routine time weekly/monthly for your marketing operation
- Test what works and keep repeating that
- Keep a record of your return on marketing, so you’re absolute certain it’s giving a great return
- Don’t ever stop marketing just like you don’t stop breathing
Costly Mistake # 3 Trying to do it all yourself
Build a team of advisers
The legendary Sir John Harvey Jones quite rightly said “As managers, only do what only you can do” – perceptive, precise and helpful.
The biggest mistake manufacturing companies make is to believe they can do it all by themselves. This is especially true as we have just seen in relation to marketing.
While technically you can do almost everything, you’ll do almost everything poorly. We all have one or two natural talents. It’s your responsibility to identify those talents and focus on them to your best ability.
Surround yourself with people who are strong where your talents are the weakest. Great companies are built on the foundation of exploiting a few strengths, not on trying to be masters of everything else you’ll remain at the bottom.
You need the ‘right people in the boat, at the right time sailing with the tide. Employ people who believe in a common purpose and who can responsibly deliver on the expectation you have set.
- If you are doing all the work ( and are on the tools every day) then you’re an employee and not a business owner.
- If you want control then doing all the work may give you the control but you won’t have a life and you won’t get the results you want.
- If it goes like that for too long then you won’t have much of a business either!
- As a good business owner and a great leader – you must inspire your team to be the best they want to be by empowering them.
- In many cases, the team know more about what’s going on in the business because they’re at the coal face seeing customers regularly
- Grow your people and they’ll grow your business.
- The right team within your business is your most prized asset. If you can help them do the right things, right, then you’ll have the time to do the things which you should be doing as a business owner.
If you’re serious about growing your business then you’ve got to spend time working ON your business and not IN it.
This means thinking and working like a business owner and not an employee. If you’re busy doing all the work then you won’t have time to drive your business forward. Now that’s fine if you don’t have ambition and if you don’t mind suffering from stress and anxiety at some point not too distant in the future.
If, however, you want to be the best that you can be then understand your limitations and let others do what you can’t. Empower them and wait for the magic to happen, you’ll be pleasantly surprised.
How To Avoid Doing It All Yourself Actions:
- Employ people with great attitude
- Encourage them to think how you think
- Delegate and monitor
- Work on the things which only a business-owner should be working on
24:7:365 Mistake # 4 Mismanagement of time
Time is money
We don’t deliberately intend to spend time on the wrong things. In fact, it is the total opposite, wrong things are all the things which keep us from doing the things we’re supposed to be doing.
Hence we end up spending time doing those things are which we most certainly should get others to be doing. As business owners it’s imperative that we have the discipline to be able to manage ourselves effectively and at the same time manage our team effectively and efficiently.
Being efficient means doing things right and being effective means doing the right things right.
In reality there are not enough hours in the day for us to be able to be spending time on doing things which we shouldn’t be doing. If we can avoid “wasting” time however there is plenty of time for us to be doing the things which we should to be doing. Now that makes perfect sense, doesn’t it?
The Zen saying “To know and not to do is not yet to know‟ captures this perfectly! We must be much more disciplined with our time and be very clear and focused on our goals.
An approach to making better use of available time
- List your priorities every morning and then look at the three most important and urgent tasks you want to get done for the day.
- As you complete the first task highlight it and tick it.
- Then look at next three tasks which could either be important and urgent or just important.
- Again prioritise (or re-prioritise) which task you should start on next and concentrate on getting that particular task done.
- Alongside this it would be a good idea to check in on your e-mails only two or three times a day to ensure that you don’t spend unnecessary time on responding to e-mails, just as they come through your inbox.
- Now not looking at emails could seem impossible. To make it easier, only login to your email facility 2 or 3 times a day. If your email inbox is open then you’ll be tempted to check your emails more frequently and you’ll end up consuming time when you should be working on other things.
This approach will help you working on the high pay-off items so you are spending time on maximising your income and profits without wasting time on tasks you should be delegating, by now!
Once you are able to increase your profits you can then improve your cash flow, increase your personal wealth, spend more time with your family and afford to do the things that really matter to you and your loved ones.
Remember to delegate wisely
Delegating is one thing, but releasing responsibility is another. You must delegate wisely to competent and capable team members who are given an opportunity to shine and aren’t continually micro managed. Falling short here will not only lead to deadlines not being met but switched on team members will become demoted.
Find a good balance between delegating duties and staying involved, to some degree, in all major areas of your business. Communicate with your team and ask for regular updates.
Establish methods to assess the quality of the work being done. It’s your job to provide the vision for your company’s future, but you don’t have to know all the answers. Smart business owners rely on outside professionals, such as accountants, web designers and business advisers, to help make their businesses profitable and to make successful decisions.
Without focus and achievable goals you’ll find it hard to set priorities and achieve your full potential.
Make Time For Action:
- Write down your daily tasks
- Prioritise your work in line with your goals
- Work on the important and urgent tasks
- Be effective by doing the right things right
- Let your team help you with tasks you don’t need to do
Costly Mistake # 5 Failure to Measure
What get measured, gets done
As an engineer I can’t over emphasise the importance of measuring your business results. It’s so critical by measuring what gets done gets improved.
When you measure you can clearly see what the return is, and not only this, you can also see how productive you are. If you don’t have a measure for what you’re achieving then you most certainly won’t be able to find out what’s working for you and what’s not working for you.
This way, you will most certainly not be able to repeat the things that work for you, and you won’t be able to maximise your return. Losing more often than winning wouldn’t be the result you’d desire so don’t settle for it.
So you have a plan, that’s just the starting point. You must take action and constantly review your progress to ensure you’re meeting your business goals and that your team are meeting their personal potential.
When you are able to detail your activity only then are you able to look at where you are under performing. And once you’ve identified the gaps you can then look at what needs to be done in order to bridge the gap. This is a very useful and powerful exercise which must not be underestimated.
With measuring it’s also important that the things you do are aligned to your goals.
You must ensure that your strategy is appropriately planned to drive you towards your aspirations (plan).
Other articles linked with marketing metrics that may provide additional insight. Marketing metrics and analytics, marketing ROI Planning , marketing revenue analytics and Marketing Measurement Metrics
Once you’ve planned then you must take action because without action you won’t get the desired results! Of course, as you are taking action do make sure that you make a note, in precise detail, about exactly everything which is going on. You should then analyse the actions you took to make certain what went well and what didn’t go well. The stuff which worked really well must be repeated.
The stuff which didn’t work so well should be improved so that those results also improve. The quality of the result is dependent upon the quality of the action.
- Plan your activity
- Take action
- Measure your performance and results
- Reflect, repeat and improve accordingly
Costly Mistake # 6 Missing out on external support
If in doubt ask the expert
Procrastination – Putting off tasks that you don’t enjoy will sink your business faster than anything else.
You can’t afford to waste time on unimportant tasks while critical tasks pile up.
All tasks need to be done; if you don’t like to do them (or don’t want to spend your time doing them), hire someone to do them for you.
If your time management and prioritising skills are rusty, hire a small business coach or attend a course to help you.
Some small business owners neglect to seek advice from external sources. Many external firms or agencies could provide direction or solutions for small business problems. Advice is available from accountants, solicitors, business and marketing consultants and government agencies such as direct link.
As a good business owner you must identify the areas where help is needed and enquire into possible solutions. It is not enough to gather advice. You must believe and act on it to receive the benefits.
It makes sense to
Seek professional advice as it can help really boost your business. According to the National Business Survey, businesses experience almost 20% better growth rates and better financial management when they take advice from business support organisations.
Most SME’s have a very tight budget when it comes to investing in business support. Due to this most business-owners try to bridge the gap by using their own experience (limited at times) to try and develop and grow their business.
With virtually all the insurmountable task of running a small business, coupled with
all the responsibility of running almost every element of your business, time is of the
Working long hours, overstretched, undercapitalised and all the other issues which are faced by small-business owners, the last thing you want to be doing is trying to do everything on your own.
Having an external party to act as a sounding board is always a great thing. They can give you an independent external opinion which you may never consider because you’re always pre-occupied in the business with pressing matters.
The benefit of external experienced qualified external support
You will most certainly lack expertise in some areas of running your business hence why it is important that you hire non-executives to advise you in areas where you feel your business most lacks expertise.
This will give you the confidence to be able to move your business forward and at the same time discuss delicate issues with a trusted adviser.
Clearly, you would need to ensure that you appoint an experienced and trustworthy adviser. As it happens, your accountant who is also your trusted adviser is in the best position to be able to advise you.
They will have a lot of experience in dealing with businesses not only from a financial perspective but also from an operational, sales and marketing, possibly HR and Management perspective. The importance of this cannot be over emphasised and it is something which you must not overlook.
- Don’t try to do everything yourself
- Seek external advice
- Try new things
- Seek enjoyable balance