I’m feeling rather ashamed by the length of time since I published my last post – it’s been almost three months! – however at least I made it back here. During this time, I’ve been lucky enough to win some new clients and do some interesting work, which triggered an idea to write an article about the most common mistakes I’ve seen startups and small businesses make.
I promise I won’t name and shame, and rest assured that some of these are mistakes that I made when I was first starting out. So here they are.
1. Not doing the proper planning and research
I’ve written many blog articles about the importance of creating a business plan and doing the necessary research before you decide to start a business. I am still amazed how many business owners I meet who are simply not ready to own a business, by the sheer fact that they have not done any pre-work. It seems they woke up one morning and said, “I think I’ll start a new business today.”
So if you think you fall in this bucket, stop reading here and first read these articles:
- Ready to start a business? 10 questions you should ask yourself first
- The 5 most important small business lessons I’ve learned
- Business strategy for small business: do you need one?
2. Not taking the plunge
This is the exact opposite to the mistake #1. Here I am referring to the would-be business owner who does nothing but research and plan, and attend training sessions and seminars, etc. and just delays actually starting the business.
Of course, it can be scary starting a new business, because it needs you to take a leap of faith, probably quit your (secure) day job and potentially live without much income for a while until the business takes off. But if you never try, you’ll never succeed. So get out there and get the business moving.
This might include going to those networking events you’ve been avoiding, investing some money into getting a good website and online presence, quitting your day job, hiring that employee. JDI (just do it!).
3. Being too impatient – expecting success to come overnight
This happens a lot with my startup clients. They are so desperate to start earning income that they are unable (and sometimes unwilling) to allow enough time for the techniques and strategies we implement to actually work. Success does not come overnight (unless you have a never-before-seen and highly demanded new product/service) so you simply need to wait.
And while you wait, you make sure you get all your ducks in a row (business plan in place, suppliers lined up, resources available, processes designed and tested, appropriate training done, etc.) so that when those clients come rushing in, you are ready not only to service their needs but also to delight and surprise them with an excellent client experience.
4. Not willing to get your hands dirty
I am a huge advocate for understanding how every single aspect of your business operation works before you outsource or delegate any functions or tasks. Some business owners prefer to take a very hands off approach, but I think this is a mistake. A lack of understanding by the business owner of how things work in practice means that other people have the control (particularly if they are critical or core processes). It also introduces risk to the business if those outsiders leave or are unable to work for whatever reason.
As a business owner, get to know your own business in detail and be willing to get your hands dirty now and then. This ensures you stay close to the business operation and stay close to your employees and service providers, meaning you can more effectively monitor their performance and outcomes.
5. Thinking people will do you favours for nothing
Without sounding too cynical, nothing is free in this life. And nobody will do you a favour without expecting something in return. I’ve met many startups who truly believed that I would provide services to them for free because I should feel sorry for them (since they have no customers or money). Or at least for a very small fee. Another common one is suggesting they will pay a commission based on the number of new customers they get over the coming months and years.
If you’re a startup or small business and are thinking this is OK, think again. If you want quality services, you must pay market rates for them. And if you can’t afford to pay someone, then get yourself educated and do it yourself until you have some money to pay someone. In any case, having a buffer of cash/funds available for business expenses and as backup income is super important in these situations. Read this article to learn more: Startups: the truth no-one tells you.
Don’t panic. Really. Panicking will not achieve anything. It’s not like there’s a train coming and you’re stuck on the tracks and can’t move. There is always a way out (provided you have considered your risks and taken actions to mitigate them – read this: 12 common risks SMEs ignore until it’s too late). You can back away from the business.
So do your research, make a plan, give things time to work and if it doesn’t, then it doesn’t. I am not saying it’s a small thing for a business to fail. Of course, that is not a good result, but the key thing is not to catastrophise and to downplay the worst case scenario. I find that if the fear of failure is reduced, the pressure to succeed eases also, which is much more comfortable all ’round.
7. Being obsessed with money
Starting a business with the sole aim of making lots of money is asking for trouble. I have no empirical evidence that mercenaries are not successful (in fact, there’s probably a lot more evidence that the opposite is true), however it’s a bit of a karma thing. A sole focus on money can mean that all decisions become about the money and not much about things that should matter, like providing a product or service that helps people, solves a problem or contributes something to the world.
So there you go. The 7 most common mistakes I’ve seen startups and new small businesses make. Let me know if any ring true for you, whether you’re a new business owner yourself, or whether your business is older and you experienced some of these things when you were first starting out.
* Image sourced from Death to the Stock Photo.
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About the Author: Angeline Zaghloul is an expert in business strategy, client management and business processes, and is the Principal of Peer Business Consulting, a Sydney-based consultancy providing strategy and operations support to startups and SMEs. Angeline also publishes a regular blog which provides research, advice and tips on key issues facing businesses.