We all learn from our mistakes right? It’s how we grow, how we evolve… ourselves and our businesses. What doesn’t kill us makes us stronger, yes?
But what if those mistakes really threaten to damage our business? Even stop it dead in it’s tracks?
Here are 5 big ones that we think you should avoid – the damage really outweighs the learning curve.
1. Not Paying Attention to the Numbers.
It doesn’t matter if you are in the R & D phase, testing phase, your first purchase order, or even if you have been in business for a while;
No cash = No business.
The most common cause of failure for small businesses is a lack of cash. Being unable to invest in marketing and advertising, order materials to fulfill orders or even pay basic monthly bills can bring your business screeching to a halt.
It’s essential to cultivate good habits in the early days, which will help you through the inevitable bumps and financial dings which every start-up has to endure.
Keeping an eye on your Cash Flow is the MINIMUM task that you should do – on a weekly, if not a daily basis.
Download our E-book – 10 Ways to Turn Your Business into a Cash Cow
2. Getting the Wrong People on the Bus.
As Bob and I look back at all our entrepreneurial endeavours, the one common denominator to both our successes and failures is this: the people we have chosen to work with.
When we start out, we are so grateful for any offer of help, be it financial or otherwise, sometimes even positive attention , that we don’t “play the movie to the end” to see if the person is a good fit for the business overall.
Investors are tricky. It’s very hard to turn down offers of cash. But it’s vital to stop and think before you jump into bed with an investor, without assessing the pro and cons.
Investment often comes with strings – a say in how the business is run, a veto on future projects, pressure to distribute in a certain way – that may not jive with your personal values or vision for your business.
The same holds true for partners.
The other big mistake is not severing the relationship as soon as it becomes apparent that the arrangement is not working out.
I can truly say that the most stress I have ever experienced in a business setting was caused by burying my head in the sand about a partnership that wasn’t going well, and just hoping it would get better.
Guess what?
It never gets better!!
Not only can the wrong people on the bus cost you financially, it can also cost you your passion. And that’s a very high price to pay.
Check out our related blog
3. Expanding Too Soon
It’s so tempting – expand into your own dedicated business space – your own office, your own factory, brand new equipment, new computer, smartphone, tablet….and don’t forget about all that software you can’t possibly function without…after all …….if you build it, they will come…right?
Wrong.
If you are getting stuff done in your basement, or on your kitchen table – keep going! If you think you need expensive software – try the trial version first, to see if you actually use it, before you commit to monthly payments.
The biggest mistake I ever made was to hire an assistant way too soon – for about six months I was working my tail off – just to make payroll!
If you need help, consider using a Virtual Assistant to delegate certain task to – you can hire them for a few hours, or a specific project – you won’t be committed to a monthly overhead.
It is hard work when you start off, you are working stupid hours, and it is inconvenient to use the garage/basement/spare bedroom, but just take baby steps at the beginning, and grow slowly.
4. Skipping the Research.
You’ve got that great idea, you are really excited, your mum says it’s awesome so……you go ahead and do it! Without ANY research!
No checking to see if your idea is unique, if there is any competition – not even a patent check – we see it again and again.
Before you know, you’ve invested time and money on a project that’s not going anywhere.
The big problem we all have when we start out…….we don’t know what we don’t know!!
Be excited, but be thorough.
For our Top Ten Reasons to Research…click here
5. Ignoring the “why”
This may seem a bit weird. Why are we in business? To make money of course…….wrong!!
Most successful entrepreneurs are not motivated by money. They are motivated by their passion for what they do.
My husband loves solving problems. He loves inventing things. He likes making money too (thank goodness), but innovating and tinkering makes him happy.
Try to talk to him about administration, marketing strategy, and business processes? He gets a glazed look in his eyes and switches off.
So we structure our business so that Bob can focus on innovating and prototyping, and doesn’t get bogged down in the ‘business stuff”.
The profit follows.
And Bob is still in love with his business.
It’s impossible to avoid making mistakes – if you do, then you aren’t getting out of your comfort zone, you aren’t growing as a business owner or a person.
But these Big Five can threaten the very existence of your business – and you know what they say, “Only a fool learns from his own mistakes, a wise men learns from others”!
