The world of ecommerce can be an exciting, invigorating environment to compete in. If you’ve recently gained a foothold in the realm of online retail, it’s likely that one of your focus points is sustainable growth.
If a business is scaled, it increases its revenue at a faster rate than it takes on new costs. For example, an online fashion retailer which operates on a scaled business model may gain over $10,000 in new revenue after spending only $1,000 on paid social media advertising. It’s an attractive proposal, but scaling isn’t easy — there are many pitfalls that you’ll want to avoid if you’re looking to boost the growth of your business in the long term. If you’d like to find out what these are, read on…
Hiring the wrong people
No matter how much time and effort you put into strategizing, negotiating, and speculating on future opportunities, your carefully constructed venture can soon come crashing down if you hire the wrong people.
If your business is growing, your team will grow with it. It may even be that you’re a solo entrepreneur suddenly tasked with hiring your very first employee. In any case, it’s important to set out a thorough recruitment procedure, through which you can ensure that every addition to your business helps, rather than hinders, your business. Remember — it costs far more to fire and rehire than it does to simply hire the best person for the job. Don’t be afraid to put your candidates through their paces with second and third-round interviews if it means that your final selection is perfect for the business!
Spending money in all the wrong places
Almost every business owner has wild dreams of rapid expansion, profits shooting through the roof, and stratospheric success. Though Unfortunately, many entrepreneurs attempt to achieve this by hurling wads of cash at every problem they encounter. And while money may often be the answer, the way it’s spent is often the deciding factor in whether the issue can be resolved.
For example, a poorly-optimized website can play havoc with your site’s search results ranking. It’s relatively well-understood that your website’s load speed will affect how Google ranks your page and based on this fact, many businesses may choose to upgrade their website’s hosting. However, there’s no use in splashing out on the fastest Magento hosting or hiring a team of specialists to fine-tune your site if customers are eventually confronted by poor customer service. Migrating your website to a provider like Cloudways can provide a sharp uptick in performance, but it’s no substitute for a solid business plan and a developed set of achievable goals.
Many people grow into leadership roles after spending time in management roles, while others are born leaders. Unfortunately, there are a select few who simply aren’t capable of managing a business effectively at all. In this case, it’s always advised to draft in some help!
Hiring someone to handle your leadership role is the best option if you don’t possess a particular panache for such endeavors, and it’ll free you up to focus on the areas you do have talent, too. While it may hurt your ego to hand over the reins to someone else, it could mean the difference between success and failure. Hire the right senior leadership team and there’s actually very little risk of losing control. In fact, you’re likely to find the opposite — you’ll get to steer the business as a whole, while your team focuses on ensuring the entire operation runs smoothly.
Is your company’s accounting in order? Does your ability to locate and report on specific expenses or income streams give you confidence or fill you with dread? If it’s the latter rather than the former, we’d recommend dedicating some time to reorganizing your accounts procedures.
If you’re managing a team of employees, you should consider using payroll services to ensure you adhere to all government guidelines and regulations — sometimes, growing businesses fail because they mismanage money meant for their payroll. We’d also recommend you keep everything recorded — perform regular checks of your books and accounts, and categorize all the different types of assets and liabilities.
Take bookkeeping seriously, as it’ll give you an accurate and reliable overview of your company’s financial status. Software like QuickBooks can make the entire process much easier, but no matter how boring the accounting tasks may seem, they’re absolutely essential, so don’t neglect them!
Focusing on marketing (and ignoring everything else!)
We’ll admit that marketing is (and always will be) an essential part of any ecommerce operation. However, too many business owners make the mistake of pouring all of their manpower into their marketing strategies, while neglecting other key aspects of their business.
Customer service, financial management, new product development, and even HR — all of these elements are just as important as marketing. Brand awareness and new sales generations may be some of the most exciting aspects of ecommerce, but don’t let them hog the limelight.