1) No Umbrella Business Plan or Strategy - Without a plan, there’s no serious way to gauge the growth and progress of your business. You need a realistic map for where the customers will come from and where your business is going. You also need a plan to bail you out when difficult personal and business times come your way. Solution – get a plan together. Stop thinking about it and do it.
2) Getting Tunnel Vision and Never Leaving the Tunnel - Many entrepreneurs get an idea, move forward with the preparation but never seem to be able to make it work. In fact at times they will hold so tightly to the idea that they will lose all their money, sometimes their family and ultimately their business. The sad result is they often lose the one thing that pushed them to begin with – their confidence. Without the confidence the likelihood of another run at self-employment diminishes. If the ship is sinking don’t go down with it. Get out while you are still able to breathe. Once you’ve caught your breath, re-evaluate, learn from the experience and dive back in. Solution – ask for some advice from other business people. Be honest with them and get some feedback. If you can afford it, hire a business coach.
3) **Make your business your business and your charity your charity. ** Beginning entrepreneurs nearly always make the mistake of “giving away" the store. They give discounts to the first customers they receive as if to impress or court them. Often these customers are friends and family. Unfortunately, during these critical times an entrepreneur cannot afford to do this. He or she is only cultivating cheap clients that will never want to pay the going price for services or products. Additionally these are the times when cash flow is at a minimum. As a business consultant I often get bothered that friends and family fail to see this. The early years is when those close to you should be paying you more, not less for your product/service. Unfortunately, many people are under the false impression that if someone has their own business they must be wealthy. Solution - when conducting business charge your full rate to everyone. If you want to be charitable, write a check to your favorite charity. Or alternately be creative in how you handle these discounts.
For example, in my mobile entertainment business I told those I knew, that if they got married on a Thursday I’d do it for free however my Fridays and Saturdays are limited to just 52 times a year. If I don’t get my rates on these days I pass up income that I need to sustain my home and business.
4) Not Knowing Your Customers - We live in a dynamic world. Constant changes mean that business too is always changing and in some way, large or small, your customers are changing. There are countless examples where companies both large and small fail to see the publics changing direction. Changes in your customers’ preferences and your competitors’ products and services can leave you eating dust. You need to know your customers well. What are their buying patterns? Where do they live? How often do they visit you? Why don’t they need you more often? What are they saying about your services or products? How do your customers perceive themselves? Solution – Make a point to call each customer on a regular schedule to see if there is anything they need or any improvements they see you can make.
5) Ignoring Your Financial Situation - Whether you have a lot of money or a little, you need to know where you are at financially. Many entrepreneurs will turn a “blind eye" toward their financial situation. They will deny they are losing money and/or failing to get paid. It goes without saying, that entrepreneurs are typically more confident people with positive outlooks. This is not only their strength but at times it can be their weakness. When buying things for your business ask yourself, “will this make me more money or not?" If not, realize the need is really a want. Numbers don’t lie, so don’t find a way to make them lie. Solution – have a third party keep your “books" so you can get a true picture of where you are at financially.
6) Ignoring Employees - Employees are an extension of your company. They represent you to the public - for better or worse. They can make or break your business. It does not take a genius to figure out that if you fail to treat your employees with respect they will fail to treat your business with respect as well. After all they can’t fire you but they sure can treat your clients in a manner that is far from beneficial to your business. Solution – incorporate a weekly meeting with your employee/s. Be sure to keep the meetings positive and welcoming for everyone.
7) Being the Lonely Martyr - Many entrepreneurs fall prey to their own picky, “control freak" problems. They never trust or let go responsibility in fear that it won’t be as good. The truth is it probably won’t be. The reality is however as an entrepreneur you are in business to make money. If you have employees then you need to use them to multiply your efforts as best you can. Solution – breathe, and again, breathe… now relax and resign to the fact you are not the global manager of the universe.
8) No Short or Long Range Plans - You may have heard the old adage that if you fail to plan, you plan to fail. Whether it is a business goal or a personal goal you must lay out your plans with an end goal in sight. Otherwise, as Zig Ziglar says, you will be a wandering generality not a meaningful specific. Many entrepreneurs go into business without a long range plan on where they want the company to go. You must have goals and execute them. Solution – Make goals and strategies.
9) No Mastermind -– Find a businessperson you respect. One that has been in business for a long time and seek his or her advice when faced with tough decisions. Keep in mind you’re still the ultimate decision maker, the one that has to live with the outcome. Be sure and weigh this opinion against your own thoughts too. Seek the wisdom that only years of experience can develop. Solution – get one, you’ll be happy you did.
10) They Believe Their Own B. S. Need I say anymore? Solution - have a good friend or two tell you what it is you’re not seeing. Preferably a friend with business experience. You see, friends often stay friends because they at some point accepted us for who we are despite our imperfections. “That’s why they are our friends!"
11) Quitting - Unfortunately many entrepreneurs quit just when things are ready to soar. This is often because their plan didn’t account for certain setbacks or enough time to realistically incubate a business. They typically run out of cash and motivation gets whipped by frustration. Solution - Keep your Day Job until your business, your mindset and your finances are relatively stable.
12) Ill Equipped -– financially, educationally, resources etc. Solution – learn, learn, learn and save, save, save.
THE DIRTY DOZEN
The Top 12 Mistakes Entrepreneurs Make
Excerpt from the business planning audio and workbook program, “Lemonade Stand Simple", A Seven Step Program to Turn Your Business Idea Into a Money Maker.
Reprints are welcome with the tag below or approval by author T. Dan Nichols:
Author Dan Nichols is available by phone 248-541-0250 or email firstname.lastname@example.org for interviews and speaking engagements. To purchase the guaranteed business planning program visit the website at http://www.lemonadestandsimple.com . To receive regular streetwise business advice, email email@example.com . “Lemonade Stand Simple" is a Federal Trademark of P2E LLC, a Michigan Company. All works are copyrighted 2001-2005