Seven mistakes entrepreneurs make

By on August 14, 2013
entrepreneur_mistakes

As your fledgling business starts to grow, it’s critical that you don’t inadvertently strangle it in its infancy. Hilary Briggs shares some early pitfalls to avoid… 

Doing too much yourself

Many business owners fall into this trap as they attempt to keep their costs to a minimum. But ultimately it can mean you get bogged down in day-to-day issues and fire fighting. Many kid themselves that everything is OK and only start to hire staff or outsource when the cracks are beginning to show. By then it can already be too late.

Thinking everyone will be as passionate as you

Many businesses are founded because the owner is good at something and enjoys doing it. What entrepreneurs can forget is that a business also involves difficulties such as finding clients, marketing, recruiting and motivating staff, and managing cash flow. You may even get some petty internal politics springing up.

Growing too rapidly 

Typically the owner’s passion and belief in the business is very high when sales start to come in, so they gear up by taking on staff and expanding premises only to have to cut back as the sales increase turned out to be just a lucky start. Make sure you plan for any expansion – often business owners fail to do this. They celebrate the increase in business and then blame the banks for pulling the plug just when things are picking up.

The reality is you need to sit down with your bank manager and discuss the need for funding several months in advance to avoid any panic requests.

Not having a sounding board

Many new businesses are too small to have a proper board or even a non-executive director. Some issues are not appropriate to talk to staff about and often partners and friends just don’t ‘get it’. This can be very damaging. Having some one professional and impartial to talk to is important as it may yield new perspectives – both positive and negative.

Bad hiring

It’s common for recruitment to be left until the last minute (to save costs), so a rushed decision is made. It’s easy to rely on friends and family ‘helping out’ – who may be good enough in the early stages – but in the longer term they can be a constraint, and a very tricky problem to deal with later on.

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So before you hire anyone, find out how much real world experience they have. Is it relevant to what you need? Are their skills and experience complementary to yours? Do they know their own limits? What networks and contacts do they bring? Will they let you talk to their clients to get a feel of how they work? Make sure you are comfortable with all these areas before committing yourself.

Lack of self-awareness

Many business owners refuse to face their fears and insecurities, often because they don’t want to appear stupid or expose a lack of knowledge. They don’t trust other people and want to hold on to everything themselves because they believe no one can do it as well as they can.

They can lack awareness of their own personality: their strengths and weaknesses, and their impact on others. Ultimately this means they are less able to build an appropriate team around them.

Staying in the comfort zone

It’s easy to stick with people you know and understand – but there’s a downside: who’s challenging you and testing your thinking? Whilst it may be uncomfortable to hear genuine criticism, it’s better than waiting for a major problem to develop in the business because no one around you had the courage to pipe up.

** Hilary Briggs is MD of profitable growth specialists R2P Ltd. www.hilarybriggs.co.uk She’s had senior management experience at Rover Group, Whirlpool Corporation and The Laird Group plc

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