There’s no escaping it!
No matter how good you are, how hard you work and how much experience you have, it’s inevitable that along your business journey you will undoubtedly make many mistakes.
It’s just a part of the process and necessary experience for you to evolve as an entrepreneur.
This is also true of life in general.
Nelson Mandela famously said:
“I never lose. I either win or learn.”
You have to reframe the way you perceive failures or the mistakes you make and understand that they are a necessary part of your growth.
Only by making mistakes (failing) will you know what works and doesn’t work, so you can try a new approach or strategy and do better in the future.
Starting a business isn’t easy, but there are some ways you can make it easier for yourself.
Be smarter! You don’t have to solely be reliant on your own trial and error in order to grow.
Leverage the experiences of others and those around you, a useful way to do well from failure is to learn from other people’s mistakes.
And believe me, after a wide and varied career, and many years in business, I’ve made a good few mistakes myself.
So, to help you on your entrepreneurial journey, I want to share my top 5 mistakes to avoid when starting out in business, so to increase your chances of success.
1. Ignoring your instincts and intuition
As an entrepreneur or business owner, you might think that strategy, statistical data, analysis and logic are key to making business decisions;
but believe me – it’s a big mistake to ignore your intuition in business.
And yet, many people do.
Don’t just do what the business books, magazines and other business leaders tell you works for them.
There’s no single template for doing business.
It isn’t something you can choose ‘off the peg’ – it’s all relative to you and your circumstances, so don’t be afraid to go with the flow sometimes and do what ‘feels’ right.
Having a business strategy is all well and good, but sometimes the most important breakthroughs happen when you go by instinct.
You just need to trust your intuition or go with your gut feelings.
You can learn to do this by stopping all your thinking, analysing and doing and just sit quietly, even meditating
and ask yourself something like:
‘Does this feel right?’
You will probably get an indication like a physical reaction.
We’ve all felt sick to our stomach with dread or when something bad happens; or felt excited and happy at the prospect of something good.
This is similar. Or rather than a feeling, you might just get a sense of ‘knowing’ that something is right.
After some practice, it will come naturally, in the moment, without you even having to try.
One important thing I’ve learned is to pay attention to what ‘feels’ right for me, my gut instinct and to listen to what my intuition tells me.
Follow it, trust it, and you will find yourself ‘in the flow’ – a place where anything can happen.
Focus on doing what you love, follow your feelings and most of all – be yourself.
This gives you a positive energy that opens you to new opportunities magnetically attracts good things and positive outcomes to you.
2. Trying to do everything yourself!
Especially when they’re starting out, there’s a temptation for you to do everything yourself.
Whether the reason is financial, or for ease, speed, efficiency, lack of staff with relevant expertise – or through ego, or from simply not being able to let go, some of you will end up doing everything.
But whatever your reason, this is not the best use of your time.
And trying to control every aspect of your business, or not trusting others to do the job well are problematic in themselves.
Are you so insecure that you’re afraid to let experts and specialists do a better job?
If you are doing everything yourself – ask yourself why?
and analyse whether your reason is truly viable.
Why not delegate? Understand that hiring people is an investment giving you the space necessary to concentrate on growing the business.
There’s an African proverb – “If you want to run fast, run alone. If you want to run far, run together.”
Bring others into your business who know more than you.
You can learn from these individuals, but more than that – they can usually do a better job.
Leaving you to do the things you love, or the things only you can do like taking the strategic view and developing the business, long-term.
3. Lacking financial knowledge
One of the biggest areas in which entrepreneurs fall short is in not understanding the financial side of their business.
It’s surprising just how many business owners fail in this, having no gauge for the money going out as well as what’s coming in, and how to measure their profit.
They have no concept of overheads, budgeting or forecasting.
The fundamental purpose of business is to make a profit.
However, many people get confused between making money and making a profit.
These are very different things.
Ignoring the figures or believing that ‘more sales = more profit’ is a big mistake.
Some believe that paying an accountant means their job is done.
But very few accountants provide what is necessary like ongoing business financial management – as a standard service.
You will receive end-of-year accounts that show your performance over the year – but if you wait a whole year to discover how well you are performing, your business won’t last that long.
You need to know your financial situation month-by-month and week-by-week, so you can take action.
Inform yourself, and recruit a finance manager, officer or clerk to present the information you need, so you’re on top of it.
4. Not knowing your value
A big mistake is not knowing your worth and charging too little for what you do.
Especially when you’re starting out, there is a temptation to charge low prices or undercut people just to gain work and clients.
But there’s a difference between being busy and being a busy fool – who charges low prices but does twice as much work.
A lot of this comes down to your personal relationship with money.
Some people have limiting beliefs arising from childhood – hearing that you have to ‘work hard for your money’ or ‘money is the root of all evil’ become your own beliefs.
Self-doubt and low self-esteem are also reflected in what you charge – when you’re offering services you provide yourself (e.g. consultancy, ideas), rather than tangible products, this can be worse.
If you believe you’re ‘worthless’ or ‘not worth much’ you might not believe you can charge more, even when the market and competitors’ prices tell you otherwise.
You might need some help from a counsellor of therapist to deal with deep-set limiting beliefs or do some personal development work on yourself.
Pitch yourself and your charges on a par with competitors – if not higher.
People will always pay a premium for quality, reliability, trust and satisfaction.
5. Hiring mistakes: expensive executives with impressive CV’s
I admit – like a magpie attracted to bling, I’ve fallen for people’s glittering CVs.
I’ve hired people who look amazing on paper, and I’ve paid over the odds because I wanted them in my company.
I thought paying a high premium guaranteed me brilliant staff and great results.
But I’ve learned that it’s a myth that you don’t have to bring in expensive executive directors to accelerate your business success.
In the past few years, I have hired and fired many executives, and I know from experience that ambitious, experienced careerists don’t necessarily produce results or deliver value.
To my pain, I’ve committed to pay high salaries to execs who looked spectacular in theory – but in reality proved to be worth less to our organisation, and produced little or no return on my investment.
In my experience, some executive directors and business leaders become complacent or arrogant and aren’t willing to step up or get stuck into ‘real’ work if need be.
In my business, I need people who are willing to do whatever it takes.
Such recruitment errors cost me (personally and professionally) and the business a great deal – and not just financially.
Rather than having my head turned by a sparkling track-record of impressive companies and job titles on CVs, I get more value from committed, driven staff with a can-do attitude.
It’s often more cost-effective to grow executives and business leaders from within your workforce.
Onboarding is far faster than with a parachuted-in executive.
Spot potential leaders amongst your current staff and offer the right training, support, coaching, mentoring and experiences.
Give them greater opportunities to develop the skills you need to lead your business forward.
It’s good to get fresh eyes on your operation, so don’t exclude external applicants.
But equally, don’t think that success in one company guarantees success in yours.
Select candidates who are the right fit for your own organisation – in terms of shared values, vision, personality and work ethic.
So, these are my top 5 mistakes to avoid when starting out in business.
In short – trust your instincts, delegate, understand your day-to-day accounts, charge your worth, and select your managers and directors well.
I could say ‘don’t make the mistakes I’ve made’ – but don’t be afraid to make your own mistakes.