As a business owner, you might enjoy the thrill if your company does something impressive. If you can beat the previous quarter’s sales number or win an industry award, you may feel like you’re on the right track. You might enjoy a more luxurious lifestyle if you can keep gaining ground in your particular niche.
However, all that can change almost instantly. You might make a mistake that can harm your company, perhaps even irreparably. We’ll talk about some business decisions that can potentially backfire in the following article. Watch out for these if you’re flying high with your company and feeling invincible.
Moving into an Area You Don’t Know
You might know about a particular industry or niche, and you’ve found success for your company there. For instance, you might know about web handling basics if that’s your expertise area. You might decide that since you’re doing well in that particular industry, you can expand and try something completely new using the same company name.
If you do, that may not always go well. Think about it for a moment: how much sense does it make if you’re a tennis shoe company and you suddenly decide to start manufacturing skincare products?
Some companies find that it’s better to stay in their lane. If they try expansion into an area where they have no experience, they can lose a lot of money and might even have to shutter the business entirely.
Expanding Into a National or International Market
Maybe you’ve found some success regionally. You started a brick-and-mortar store location, and then you opened a few more in the same town or city. Maybe you even decided to open some other locations around your state.
You may feel like now’s the time to go national or international. You might think you have a business model that will do well from coast to coast, or maybe you will open up some locations in the UK, Japan, Mexico, or elsewhere.
Most business owners understand that massive expansion isn’t easy. It’s a different animal from regional expansion. You might spread your resources too thin, or else you might not find the same reception for your products or services that you enjoyed on a local level.
It’s never possible to tell whether you’ll find national or international success until you try it. Still, you might do some market research to help you determine whether you can find a toehold for your brand on a larger scale than you’ve previously attempted.
A Risky Marketing Campaign or Spokesperson
You might know that as a company, your branding matters a great deal. You’re trying to cultivate a certain industry reputation. You get to that point with your website, your logo, your packaging, and other elements.
Your marketing campaigns matter as well. You can probably think of the most famous marketing campaigns of all time and what they did for their respective companies. The right marketing campaign sometimes means doubling or tripling your sales if you can strike the right tone with your messaging.
The wrong marketing campaign can completely torpedo a company’s fortunes, though. Maybe you come up with a campaign you think depicts your company in a positive light, but the public doesn’t see it that way. You might get a lot of negative press, and you can lose sales.
You might see the same result if you pick the wrong spokesperson to endorse your brand or products. You need to do market research before you choose a celebrity spokesperson or influencer to talk about your brands on social media or appear in your TV commercials or radio spots.
If that spokesperson does something controversial, or they did at some point in the past, think about that before you hire them. You’re linking them to your company in a very deliberate way, so you’d better make sure the public likes them. You particularly want your ideal customers to like and respect this person.
Taking the Company Public
You can make money by taking your company public. Taking it public means putting company stock up for sale on the New York Stock Exchange with an IPO.
When you do that, you allow people to buy into the company. All the major companies do this, like Amazon, Microsoft, Apple, Walmart, etc.
You can certainly make money doing this that you can use to expand your reach. You can open more brick-and-mortar locations, hire more employees, put more money into R and D for new products and services, and so forth.
This move can also backfire, though. Maybe you take the company public, and then you face some sort of scandal. Your CFO might say something controversial, or possibly one of your products malfunctions and injures or kills someone.
If anything like that happens, your stock can plummet. If you didn’t take the company public, you might still lose sales, but your stock tanking reflects the public’s opinion in a very specific and undeniable way. Going public can help you, but it can also harm you in certain instances.
Using Social Media Incorrectly
You might already use social media for your company. Perhaps you use platforms like Twitter, Meta, Instagram, Pinterest, YouTube, and more. You probably utilize the ones that you know your customers use.
You can use these social media platforms to communicate directly with everyone following your brand. You might use them correctly and get more people to buy from you. Maybe you post funny messages or motivational ones.
Whatever messages you post, they need to represent your brand correctly. You should not use your company’s social media profiles the same way you would your personal ones.
The messages you send out can help your brand or harm it. If you post something controversial or that the public takes the wrong way, you might face a firestorm that you’ll need a PR firm to help you extinguish. Social media is a powerful tool that you should use with the utmost care.
Founder Dinis Guarda
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