0 Business Mistakes That Will Nearly Break You…Literally
by NEIL PATEL on DECEMBER 28, 2009
Starting a business is
hard! You know it, I know it, and everyone else in this world knows it. But
what you probably don’t realize is that it is really easy to screw up your
business.
Entrepreneurs have a
tendency to mess things up by making stupid mistakes. So, save yourself from
being one of these foolish entrepreneursby
avoiding the following mistakes:
1. Stop thinking big
If you want to be a big
corporation like Apple, Google, or Microsoft, you have to think big, right?
Wrong!
None of these companies
were thinking big when they first started. Thinking big will just cause you to spend more
money than you have to and, more importantly, cause you to move really slowly.
Agility is what you have
that a bigger company doesn’t. You can move faster than big companies can even
if you have a lot fewer resources. When you have a small team and little
cash in the bank, you tend to do whatever it takes to survive.
2. Get out of your cave
Do you have an idea of
where you want to take your business? I hope you don’t because your vision is
probably different than your customers’.
You have to get out of the
mindset of “I want” because it doesn’t really matter what you want. All
that matters is what your customers want.
Start surveying your customers to figure
out what they want and, more importantly, understand why they want it. This
will help you create a product that would be so welcomed by your customers
that they would be very disappointed if your product or service didn’t exist.
Having this will help you make more money.
3. Money doesn’t solve problems, it causes
them
If you think money is what
you need, you’re wrong. Having less money will spur creativity and allow you to
come up with unique ways to get what you want.
Plus, the more money you
have, the more comfortable you’ll become. And the more comfortable you are, the
more your business will suffer.
For example, I didn’t have
much money when I started my first company, so I had no choice but to figure
out how to make it profitable quickly.
On the other hand, with my
second company, I had a bit more money, so I wasn’t worried about
profitability. This caused the company to grow a lot slower than it should have
(this will be getting fixed soon).
So, before you hit the road
for six months to pitch to a bunch of VCs, think
about how much further you would get if you spent that time working on your
business.
4. Don’t hire too quickly
You’ll know when things are
looking good because at that point you’ll need more employees. But before you
make your first hire, you’d better know what roadblocks the employee is going
to run into.
The only way you are going
to find out what these roadblocks are and what solutions you will need to
implement to overcome them is if you do your new hire’s job for a
period of time. So, before you hire an employee to fill a new job position,
make sure you take on the duties of that position for at least a week.
5. It’s better to have hunger than talent
Hiring talented employees
is like flushing money down your toilet. Yes, typically it’s a smart move to
hire talented employees, but that usually isn’t the case for start-ups. This is
why:
1.
They require high salaries.
2.
They move much slower.
3.
They won’t stick around forever.
4.
They get stuck in their own ways.
Employees who are out
of college or looking to get into the corporate world will be a lot hungrier.
They don’t have all of the options that talented employees have, so they’ll
work a lot harder for a fraction of the cost.
Plus, just because
people did really well at their last place of employment doesn’t mean
they’ll do well at your company.
6. Emotions and business are a bad mix
It’s hard to think without
your emotions. From a young age, most of the actions you took were based
on your emotions instead of logic. So, why would you stop now?
You’ll get further along if
you start basing them
on metrics.
Sometimes, the best way to
do this is to step back and take a break when feeling emotional. Once you
calm down, you can then reevaluate the situation and make a decision.
7. Don’t get ahead of yourself
Entrepreneurs have a
tendency to get trapped in a Wonderland. They’ll start dreaming about how much
money they are going to make. Are you one of them?
I hate to break it to you,
but dreaming is unproductive. There is no possible way you can predict how well
you are going to do. So, stop dreaming!
If you are going to follow
someone’s word, follow Nike’s: just
do it. If you want to be rich and successful, you have to work
hard. There is no shortcut.
8. Focus, focus, and focus
Expanding is a great way to
create multiple revenue streams and diversify. But for your company, it is a
bad idea. Here is why you should focus:
- Crawl before you walk – I don’t mean to offend you, but your
business is like a baby. You are naive, and you still have a lot to learn,
but you probably want to do what all of the other big boys are doing. If
you try to run before you can even walk, you’ll just get hurt (or in the
business world, make a lot of mistakes).
- Don’t spread yourself too thin – there isn’t enough time in the day to run
multiple businesses. You are more likely to succeed if you put all of your
time and energy into one company.
- Dominate first – your company will be worth a lot more if
you are the leader in your space. Before you expand, you should try
to become the leader in your space.
9. You’re not that smart
If you think you know more
than your competition, you are wrong. Never underestimate them because no
matter how dumb they may seem, they were still able to create a company that is
larger than yours.
Don’t be afraid to ask other people for input. There is nothing wrong with
asking for help because it will save you time, money, and potentially give you
insight into your competition.
10. No detail is unimportant
You can’t be in control of
everything forever. Eventually, you’ll have to pass off your bookkeeping to an
accountant and your hiring to a recruiter. And you’ll probably even pass off
managing those people to someone else in your organization.
Although you can’t do
everything, you should still know what’s happening in your company. Even the
smartest employees make dumb mistakes, so if you know what’s going on, you’ll
be able to prevent some of those mistakes from happening.
Conclusion
Don’t screw up your
business with a stupid mistake! Learn from the mistakes other entrepreneurs
made so you don’t make the same ones.
And if you happen to make a
mistake, don’t worry because we all make them. What separates the good
entrepreneurs from the bad ones is that good entrepreneurs learn from their
mistakes and keep moving forward.
