Entrepreneurship is an exciting adventure, but also a demanding one. Beyond having a good idea or an attractive product, what really makes the difference in an SME’s journey is how internal decisions are made. In fact, the data speaks for itself: around 70% of new companies fail to survive their first two years of operation. The main reason? Management errors that, if not corrected in time, can compromise their viability.
We want to help you identify those frequent mistakes that many small and medium enterprises make without realizing it, and recognizing them in time represents a big step toward stability and sustainable growth.
1. Not having professional support or tools for managing finances
When a company is starting out, using spreadsheets seems the most practical option—it’s cheap, accessible, and allows some control. However, as the business grows, this tool is not sufficient to keep everything in order.
The main reasons are that they increase the risk of manual errors, make teamwork and data control difficult, and don’t allow for updated and in-depth financial analysis.
In this regard, investing in specialized tools or having the advice of finance professionals can make the difference. Current technology allows for automating tasks, having greater treasury control, and making decisions with clear and real-time information.
2. Not keeping track of cash flow control
Even though your SME may be generating income, not rigorously tracking the money coming in and going out can create a complicated situation. Cash flow is one of the most important indicators of a company’s financial health.
What can happen if you don’t control it?
- You might think you have more liquidity than you actually have.
- It becomes difficult to anticipate important payments or income.
- You might incur payment defaults or unnecessary debt.
The ideal approach is to maintain periodic monitoring and, if necessary, seek external support to establish an effective strategy that guarantees short and medium-term liquidity.
3. Not properly planning tax obligations
Leaving taxes until the last minute is a more common mistake than it seems. Delays, penalties, and surcharges are just some of the consequences of not having good tax planning.
Among the common mistakes are: not anticipating the impact of taxes such as VAT or Corporate Income Tax, not keeping accounting up to date, or not paying attention to key filing deadlines.
Therefore, organizing a tax calendar and having specialized advice can help you meet your obligations without surprises and, additionally, optimize your tax burden.
4. Diversifying too early
The temptation to launch new products or explore new markets can arise when the business starts to take off. But be careful: diversifying without first consolidating your main activity can be counterproductive.
Before growing, it’s essential to have the security of having a solid, profitable SME with a stable base of satisfied customers. Only then can diversification be an opportunity for real and sustainable growth.
5. Not defining or standardizing internal processes
Many SMEs operate in their daily routine based on improvisation. But in the long term, this way of working can generate disorganization, time losses, and avoidable errors.
Establishing clear procedures not only improves efficiency but also allows for scaling the business with greater ease and professionalism. Automating repetitive tasks, assigning responsibilities, and documenting processes are recommended practices at any stage of the SME.
Avoiding these mistakes doesn’t guarantee success, but it does improve the chances of achieving your objectives. If you have any doubts or want to avoid these errors, get in touch with our advisors.
