Tips from BDC on avoiding small-business pitfalls

Canadian Vending
October 22, 2014
By Canadian Vending
Oct. 22, 2014, Ottawa – To be successful, small-business owners should make innovation a priority, suggests a new research report from the Business Development Bank of Canada.

The report looks at how Canada's entrepreneurs can stay at the top of their game by mastering five fundamentals of business success and steering clear of five common pitfalls. 

The report, The Five Do's and Five Don'ts of Successful Businesses, identifies factors that are key predictors of business success. In fact, they appear to be common to many of Canada's "most successful" business leaders, defined as the top 20 per cent of businesses based on recent financial performance and employment growth, regardless of the industry in which they operate, said the BDC in a news release.

The report lists five "do's":

  • Innovate — don't rest on your laurels.
  • Ask for outside advice.
  • Have a solid plan and measure your progress.
  • Hire the best and keep them engaged — it takes more than money.
  • Build strong relationships with your key suppliers.

The research also shows that many businesses that have mastered their day-to-day operations can run into financial difficulty because of some fairly basic but common problems. To determine why, BDC examined 118 well-established companies in its portfolio that had, at least temporarily, run into financial difficulty. On average, they had annual revenues of $7.8 million and 56 employees, and had been in business for over 20 years. Five common pitfalls emerged from the analysis:

  • Don't rely on too few customers; diversify.
  • Don't underestimate the importance of effective financial management.
  • Don't leave contingency planning until it's too late.
  • Don't ignore what's happening in your market.
  • Don't wait too long to get help.

Read the full report.

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