The Volkswagen Caddy “However Big Your Ambition” report has been commissioned to understand the common mistakes business owners regularly make, and to help prevent bosses from continuing to make costly blunders.
The research finds that a third of SME owners would describe themselves as ambitious risk-takers. However the flipside of this is the opportunity for bad decisions, with taking a chance on hiring someone who ultimately turned out to not be right for the job being named as British bosses’ most common business mistake.
Not taking advantage of an opportunity was the number three business bungle, followed by offering too much of a discount and hiring a friend to work for you. Other common business errors made included pricing things too high or low or offering too many discounts.
Sixth place in the list went to taking on a relative to carry out a role in the company; while firing someone and later realising they shouldn’t have been given the boot was at seven. Trusting the wrong person or business partner was eighth in the list, with investing in equipment which didn’t do the right job and ignoring good advice completing the top 10.
Other common mistakes include allowing a junior to have more responsibility than they were ready for, acting on bad advice and losing a good member of staff because they were refused a pay rise.
Over a third (35%) of business owners admit they have let their heart rule their heads at some point while running their business, with 61% of those saying the decision proved detrimental. More than half of those (56%) say they even lost money because of it, while 43% said a friendship was ruined. Another one in ten admitted their company’s reputation was affected.
Alex Smith, director of Volkswagen Commercial Vehicles, said: ‘Running a business isn’t easy and having the best staff working for you is critical, so training and investing in people will always pay dividends in the future. It’s hard to get decisions right every time, and even successful business owners will have made a mistake at some point in the past. The key thing is to avoid repeating them.’
The report also showed that three quarters (72%) of bosses now feel less optimistic about 2013 than they did at any point in 2012. Nine in ten (93%) say that they don’t expect to achieve their annual financial targets, and just one in five (19%) say that their business is “busy”. Two-thirds (63%) say that they are reluctant to make long-term investments at this point in time.
Smith added: ‘Spending money on short-term fixes, deferring purchases or putting off investments can be a real false economy. When it comes to vehicles, maintenance costs usually increase as they get older, while new models with the latest generation engines can provide large savings in fuel costs over their predecessors.
‘Looking at the whole-life cost of an investment, rather than just the purchase price, will often actually save businesses money. Similarly, offering value for money is vital, but this can be achieved by delivering a high quality rather than selling at a low price.’
