(This article was written in collaboration with Glen Stansberry, who writes about personal productivity at LifeDev and tweets from @glenstansberry.)
Let's be honest: running a small business is not an easy task. Especially in an economic downturn. Small business owners are keenly aware that mistakes can be very costly at this point in time.
Yet in order to have success, at least a few mistakes have to be made along the way. It's a part of building and growing. Oscar Wilde once said 'experience is the name everyone gives to their mistakes.' And even the most successful business owners have had their fair share of blunders.
Here are some of the biggest mistakes that prominent business owners have made in their lifetime, and what they learned from them.
Since there are so many quotes, we've attempted to categorize them for easy browsing. Here are the 5 major sections of the article:I. Startup
Mistakes discussed in this section include:
- Taking the Entrepreneurial Plunge
- Starting Up
- Buying a Business
- Business Planning
- Money vs. Mission
- Working With Family
- Investors and Raising Money
- Financial Management
- Business Law
1. Leo Babauta, Zen Habits
“Staying too long as an employee. I was unhappy and stayed long beyond the point where I was learning anything useful (other than how to entertain myself at meetings). I could have started my own business many years earlier, and been happier that much sooner.”
2. Erin Doland, Unclutterer
“My biggest mistake was thinking that I could make a go of my business while working a full time job for someone else. It wasn't until I quit my other job and jumped into my business with both feet that things took off for me. I wish I would have made the switch much earlier than I did.”
3. Matt McGee, Small Business Search Marketing
“My first mistake was not starting. I was afraid of launching my own consulting business, and spent a few months doing something I didn't really want to do. My heart wasn't in it, and it probably showed. The lesson for me was about trusting my instincts and intuition, about having faith in myself to dive into the entrepreneurial waters and JUST DO IT. I haven't looked back. It's been the second best decision of my life.”Starting Up
4. Steve Pavlina, StevePavlina.com
“Spending too much cash. In 2004 I started this personal development business with only $9 cash even though I could have spent much more on it. No fancy logo, no snazzy web design, no business cards or stationery. I paid to register the domain name, and that was it. That’s as much as I was willing to spend before I started generating a positive cashflow. All other business expenditures came out of that cashflow.
Your business should put cash into your pocket, so before you 'invest' money into it, be clear on how you’re going to pull that cash back out again.”
5. Neal Frankle, Wealth Pilgrim
“Start your business for the right reasons. I opened my own shop because I didn’t want to sell the junk the bank wanted me to sell and I wanted more control. Those were good reasons. I also figured I’d make at least as much money and work fewer hours as I did at the bank. Mistake!
I made less money and worked longer hours for several years and I didn’t bargain for that. Most business owners report the same thing so be ready.”
6. Neal Frankle, Wealth Pilgrim
“When I started my business, I only had enough cash to support my business and my family for 3 months – that was it. My wife had gone back to college and it was all up to me. I did have clients before I made the move. I wasn’t too concerned about my low cash reserve but I should have been. Things were slow out of the gate and I had many sleepless nights worrying.
Don’t underestimate how much money you need. This is the most common cause of business failure. Also, be realistic when it comes to expected revenue.”
7. Becky McCray, Small Biz Survival
“One of my worst mistakes came in trying to purchase a business. My husband and I made the mistake of dealing with a seller who wasn't serious. He seemed serious, and even seemed motivated to sell. But when we insisted on seeing solid business records, specifically tax returns, he refused. The good news is that we didn't make the mistake of taking his word for the numbers. I fear that would have been an even bigger mistake. To this day, he hasn't sold that business, so he was clearly not as serious as he seemed. We put a lot of time and effort into that project, and walked away with nothing to show for it.”Business Planning
8. Anita Campbell, Small Biz Trends
“Too much planning. Planning is good – but when you find yourself always talking about what you are 'going to do' instead of what you are doing, you’ve taken planning too far. The antidote is to too much planning is incrementalism. Do things in iterations. This allows you to plan as you go, step by step, instead of taking forever to do some humongous grand plan and never get started.”
9. Neil Patel, Quick Sprout
“Time is not on your side. Especially with your first company, you will want everything to be perfect. The reality is, there will always be problems and nothing will ever be perfect. So instead of trying to make everything perfect, just launch your company before someone else beats you to the punch.
With my first software company, I wanted the software to be perfect before I launched it. I took so long in trying to make the software perfect that Google launched a competing product before I did. After that I had no chance of succeeding because Google’s product was free and mine wasn’t.”
10. Rieva Lesonsky, GrowBiz Media
“Sticking with an outdated business plan. OK, we didn’t really make this last mistake - but we easily could have. Fortunately, the recession, which hit as we were launching our company, forced us to reassess our business model.
Although we had spent lots of time and brainpower creating our business plan, we realized that this plan wasn’t going to work in the new economic reality. We had to revamp everything, targeting an entirely new market. It worked for us, and also reminded us how important it is to frequently ask yourself, 'Is what I’m doing working?' If it’s not, you need to come up with a new strategy.”
11. John Osher, Cap Toys Inc.
“Have an exit plan, and create your business to satisfy that plan. For instance, I am thinking I might run my new business for two years and then get out of it. I think it's an opportunity to make a tremendous amount of money for two years, but I'm not sure it's proprietary enough to stop the competition from getting in. So I'm in with an exit strategy of doing it for two years and then winding down. I won't commit to long-term leases, and after the first year, we'll start watching the marketplace very closely and start watching inventories.”
12. Charles Conn, CitySearch
“Committing to the wrong technology taught me an important lesson: long lead times compound mistakes. If you keep your development time short and go to prototype quickly, you can make mistakes and correct them before they sink the company. The future never unfolds the way you think it will.”
13. Jeff Bezos, Amazon.com
“My smartest mistake wound up playing a big role in our success. When we launched Amazon.com in July 1995, we announced that we would offer a million book titles. A rational, deliberate decision would have been to offer maybe 500,000 titles and then ramp up as we learned how to fulfill orders. But operating from a marketing and branding point of view, we said, 'Damn the torpedoes.'
We developed a fulfillment plan, but it was a huge gamble. We weren't sure it would work. If we had messed up, our customers would have spread the word over the Net to hundreds of thousands of people. It worked out, but it took a huge amount of focus and energy.
I really believe the decision was a mistake. We got lucky. I would still advise people to make the rational, deliberate choice the vast majority of the time.”
14. Leo Babauta, Zen Habits
“Worrying about making money. It's necessary, of course, to pay the bills, but it also dilutes creativity and our ability to create something great. Ironically, I make more money now that I've stopped caring about profits so much.”
15. Brian Ferritto, 42Connect
“Our biggest mistake was not focusing on Web development and e-mail marketing sooner. We got caught up trying to bring in cash flow, instead of being passionate about the work we love.”
16. Andrew Galasetti, Lyved.com
“My two biggest entrepreneurial mistakes were trying to get rich quick and not creating a business that helps others. When you chase money, the quality of your product or service suffers. And creating a venture that doesn’t help others is a selfish pursuit.”Working With Family and Friends
17. Melanie Heywood, Listasaurus
“I made the mistake of partnering with a member of my family. Not always a good idea! And being a newbie at business, I didn’t understand the value of outlining roles and responsibilities to the tee, to make sure if someone’s not pulling their weight, there’s something to refer to in writing. I have since learned the error of my ways and found a different partner, and we’ve documented everything in detail!”
18. John Osher, Cap Toys Inc.
“In my first business or two, I hired relatives. It was easy to do, but in many cases, they were the wrong people [for the job]. And it's hard to fire people, especially if they're relatives or friends. More time needs to be spent handpicking people based on skill requirements. You really need super-skilled people who can wear more than one hat. It just bogs you down when you hire people who can't do the job.”Investors and Raising Money
19. Jeff Cornwall, The Entrepreneurial Mind
“My worst mistake was raising too much money. We had had great success in our healthcare company, which made raising money relatively easy. However, we did not really need all that we raised, so it ended up being spent on excessive overhead and pursuing too much new business too quickly. I learned from this mistake that you should not raise as much money as you can, only as much as you truly need. I also learned that bootstrapping should not just be something you do during start-up, but how you manage your business throughout its growth as it helps to minimize the need for external funding.”
20. Aliza Sherman, WomenEntrepreneur
“In the '90s, I held on to too much of the internet company I founded. We were offered millions of dollars, but I took less money to keep a bigger chunk of ownership. We blew through the money faster than we grew. Lesson learned: better to own a small piece of a large pie than a big piece of nothing.”
21. Jeff Nickles, My Super-Charged Life
“Shortcuts don't work. I agreed to sell my biggest client 51% of my business because I thought they could catapult me to success. There were a number of mistakes with this decision. First, I thought this was going to be a quicker way to achieve what I wanted. I thought the capital and influence of this client would be the silver bullet that would guarantee me tons of more business. However, this was simply a transaction that occurred on paper. It did not change who I was or my readiness for success. After making this deal, I sort of kicked back and waited for things to start happening which was my next mistake. In reality, I was now accountable to someone else. I had given up ultimate authority over my business. I had diluted my ownership.”Financial Management
22. Jeff Nickles, My Super-Charged Life
“Debt is not a solution to business problems. I started out running my company purely on cash, but somewhere along the way I started thinking that debt was okay. I used the loans to falsely support the business when what I really needed to do was generate more revenue and reduce expenses. I would not do it again. It is amazing how much debt you can rack up in a short amount of time!”
23. Brian Lee, Genius Types
“Compartmentalize your money. When I first started my business I never bothered to open up a separate business checking account, I never compartmentalized my money physically or mentally. At the time, I didn’t see the rush. I thought 'money’s money, right?' I was spending my business money right along with my regular money and somehow I spent it all, which isn’t too hard as a college student.”Business Law
24. Neil Patel, Quick Sprout
“Pick the right type of incorporation. Not only is it important for you to incorporate your business, but it is important to get the right type of incorporation. It may not seem important when you are starting your company, but once you start making money it becomes a huge deal. For example, my accountant tells me that if your company makes under $200,000 in profit a year, a C corporation is good for you due to tax benefits. If you make more than that, consider getting an S corporation or a limited liability company.
I found this out the hard way, when my company started profiting 7 figures a year I had the wrong type of corporation. I ended up getting taxed twice, the company paid taxes on the profit and then I paid taxes on the dividends I got from the company.”
25. John Mann, Rolly Pollies International, Inc.
“Not knowing local building codes. During the build out of our first children’s gym in Severna Park, MD, my business partner, Joe Dondero and I worked 3 straight weeks on building a giant foam pit to hold over 6000 foam blocks. We drew up our plans, loaded 20 pieces of plywood and other materials into a minivan and moved them into our gym to assemble. 3 weeks later after assembling, installing and wrapping the plywood with carpet our project was successfully completed in our eyes. Needless to say, the first inspector walked in and asked if the carpet met the vertical burn rates in commercial buildings, plus he asked if the plywood was fire retardant. It took us less than 3 hours to disassemble a project that took over 3 weeks to complete and not to mention the back breaking weight of moving the pieces around. A giant lesson was learned the hard way!”II. Product
Mistakes discussed in this section include:
- Market Research
- Client Work / Service Product
26. Carson McComas, Work Happy
“Not adequately understanding my market before making a large investment. I eagerly ventured into a market that was full of opportunity, but which was outside my personal area of experience. As market research I relied on the verbal confirmation of people who mostly just shared my enthusiasm about the opportunity. I would have been much better off making a limited foray into the market with a less significant investment to prove out the idea. Instead I got burned, spent too much money, too much time and learned at the end what a modest investment in proper market research would have taught me without taking my shirt.”
27. Pete Kadens and Mike Chadwick, Acquirent LLC
“Perhaps the biggest mistake we made was misjudging the size of our market and the need for the services that we provide. Early on, we conceptualized that if we took one client at a time and did a good job for them, we would get referrals and, in turn, grow our client base.
However, it soon became clear that we greatly underestimated the number of businesses that need this service. We simply were not prepared to take advantage of the situation because of a lack of infrastructure and capacity.
Now we constantly interview people in order to establish a stable of qualified salespeople who we can hire at any time. Additionally, we are always looking for companies that want to outsource sales and are a good fit for Acquirent.”
28. Steve Pavlina, StevePavlina.com
“Sacrificing my personality quirks. In the early years of running my games business, I took myself too seriously and assumed that I had to act 'businesslike'… whatever that meant. Being self-employed was a weighty responsibility, and other people were counting on me. Sink or swim, right?”
29. Tom Marquardt, The Profit Repairman
“You can't lose sight of what makes your product different from the competitor. Write down what you think on a piece of paper, what your differences are from your competition and include visual and non-visual aspects, concrete and abstract items, what you think your perceived and non-perceived values are, strengths and weaknesses, pricing structure, anything you think is relevant, and finally, your gut feeling.
How are you different? Now, focus your marketing efforts to exploit that gap between those differences in you and your competitor’s product/service line. Marketing to your differences from your competition will set you apart in the mind of the consumers for their purchasing decisions and create an individual identity within tight marketplaces. ”
30. Mark W. Shead, Productivity501
“When I was a kid my brother and I mowed yards during the summers. We did the houses for a lot of doctors in the rich part of town. We based our prices on how much we thought mowing the yard would be worth to us instead of how much it would be worth to the doctors we were mowing for. After a few summers of making $2 or $3 per hour (after taking out all of our expenses) we got burned out. It was a valuable lesson. I learned to think about the value from my client's perspective instead of my own.”
31. Kevin Stettler, Happy Hen Toys
“In hindsight, I should have actually come out with prices higher than the norm within the industry and done only enough advertising to get noticed by my competition.
Although I did achieve my goal of realizing revenue quickly, my rush to generate cash flow sparked a price war that has hurt and likely will continue to hurt the overall profitability of the industry.”
32. Muhammad Saleem, MuhammadSaleem.com
“Don't undersell. You need to understand the value of the services you're offering and make small accommodations for potential clients' budgets, but dont undersell to lock someone in.”
33. Rieva Lesonsky, GrowBiz Media
“Pricing our services too low. Even after we figured out an hourly cost (taking into account our overhead), it was hard to calculate how many hours the project would take. And we were in such a rush to put in our bid, we forgot to take into account all the costs we’d incur – such as the services of a Web designer.”
34. Liz Strauss, Successful Blog
“Taking work on promises was also a mistake. Once I agreed to lower my consulting rate because a client begged 'bootstrapping' and 'cash poor.' He promised a long line of easy work that would amortize into a great return on investment – but first he had to build the framework. We had a few short consulting phone calls that mostly consisted of his borrowing my connections. Did I know anyone who could help him build X or check Y? I almost fell over when in a thank you for a referral, he wrote, 'I hope he takes me on as a client even though I can't afford his $7500/month retainer.'
Mistake: he was willing to pay for what he valued.”
35. Michael Davies, AlphaZeta Inc.
“My greatest mistake was not realizing earlier that when our clients' applications and our reputation for customer service are on the line, outsourcing is not an option.
If I had realized from the beginning that the costs of building a data center would quickly be recouped through more efficient customer service and regular, recurring revenue from satisfied clients, I would have done it in a heartbeat.”
36. Matt McGee, Small Business Search Marketing
“Trying to be all things to all people. I was somewhat desperate for business at the start, and wasn't choosy enough in the projects I did. Rather than pursuing every opportunity that comes down the pike, I've learned the value of defining my ideal client / project, and only doing that kind of work. I've learned that it's better to have smaller and fewer clients that fit well than to have too many clients that don't.”
37. Celine Roque, Frugal Pinoy
“Not applying the 80/20 principle. One of my biggest business mistakes was giving all my clients and projects equal time and effort. Why is this a mistake? Because some ventures, clients, and projects will be worth more than others. What should you spend more time on, the difficult and demanding client who pays you at a low rate, or the low-maintenance client who pays well? It took me a few years to learn to focus on the latter.”
38. Brian Tanaka, BrianTanaka.com
“During the early days of my consulting business, I didn't collect a percentage of the total cost in advance of work commencing. Not collecting a percentage up-front lead to one major problem with one client and probably contributed to a handful of small problems with other clients. Since then, I've made the up-front percentage a standard part of any new contract, and it works well for everyone involved.”
39. Joyce Wilden, Buzz Biz Public Relations
“Hungry to grow my consulting business, I agreed to work without a signed contract for what promised to be a long-term relationship. The client worked me to death – far beyond my retainer hours limit and then dropped me as soon as his big project was done. What a bargain for him. What a lesson for me.”
40. Orit Gadiesh, Bain and Company
“Early in my career I consulted with a steel company. We worked with the president of a $1.5 billion division, developing recommendations to reduce manufacturing costs by 20%. It was a beautiful piece of work, and there was plenty of proof that it would succeed, even though the capital cost was high – almost $1 billion. We made the presentation, and the president got very excited.
The next day I had a meeting with some of the president's people, and I realized they were not going to implement our plan. They weren't vocal about their opposition, but it was strong. They were proud that they could make 350 different products and didn't appreciate the efficiencies we were suggesting. Who were we to imply that they hadn't thought of this before?
I learned an important lesson: It's always good to know the 100% solution – the perfect answer – to a problem. But before you actually propose that answer, step back and look at the 80% solution. A perfect solution that can't be implemented is no solution at all. So I always try to identify the 'right' answer first, and then ask what the organization is capable of and go from there. You can't always start with what's perfect.”
41. Brian Tanaka, BrianTanaka.com
“Referrals from satisfied customers is a great way to find new business. However, it's possible to do too much work in a market outside your target market, and that leads to more work you don't want but might be tempted to take on because, hey, it's there. Then that leads to more sub-optimal work via referrals that eats up the time you could use doing the work you want to do for the folks you want as customers. I've made that mistake more than once.”III. Sales & Marketing
Mistakes discussed in this section include:
- Local Marketing
- Customer Acquisition
- Lead Generation
- Public Relations / Press
- Customer Relations
42. Rieva Lesonsky, GrowBiz Media
“Not asking for the sale. I’ve spent most of my life around salespeople, but I’m not a salesperson myself. That’s why when I first went out on my own to make sales, I often fell short.
At the last minute, I’d get cold feet and not ask for the sale. Deep down I’m shy and closing just didn’t feel natural to me. If you feel the same way, you’ve got to get comfortable with selling or your business will never succeed. Either build your own sales skills, or find someone to sell for you.”
43. Neal Frankle, Wealth Pilgrim
“I wrote about the marketing program I used to start my business. It was expensive but it worked – at least in the beginning. After a few years, things changed. It no longer yielded the same results. Of course, that didn’t stop me. I kept using the same marketing program for a year after it was clearly dead in the water. That mistake also cost me a fortune.”
44. Tom Marquardt, The Profit Repairman
“Remembering the 'hook' when marketing my business is critical. What I learned was this; when you think of a hook, remember, it is to grab the client’s attention long enough for the sales process to begin between the buyer and seller. A hook must be deliberately directed to target the clients that you would like to sell your product line to; there is no 'one-size-fits-all' hook, so you want to have multiple hooks designed for your different clients.
Hooks are not only for your new customers; make sure that your product is using hooks for repeat customers as well. With so many products, promotions and messages out there for a customer to listen to, make sure that you 'reel' them in before someone else does.”
45. Jonathan Fields, Awake At the Wheel
“If you have a neighborhood business, keep your marketing outreach local. I once launched a business and paid a boatload of money to place display ads in a national magazine only to discover the sandwich board on the street was bringing in 10,000% more business.”Promotions
46. Bill Boonstra, Bluestone Perennials
“The first time we advertised a 25 percent discount sale, the promotion was 20 times more successful than we ever could have imagined, and we were not prepared. It's hard to believe it was 10 years ago, before we sold plants online. The deal included buy-two-plants-get-one-free specials and our phones were jammed.
The money was nice. But it was not a good way to make money. We were making a lot of people angry, even after apologizing with a new voicemail message that told customers we would extend the promotion another week. A few people even called back to complain about the extension because they had gone through so much to get through the phone lines. Dealing with employees was another story. But it's a short story: We did a lot of begging for forgiveness. Basically, we groveled and assured staff that it wouldn't happen again.
Now we put a lot of attention to our promotions. With that first one, we were so busy worrying about if it would work that we never planned for it to work really well. Now we spread out our promotions by regions over multiple weeks. We still get surges with new promotions, but nothing like that first one 10 years ago. When it comes to marketing, you have to plan for best-case and worst-case scenarios.”
47. Tom Marquardt, The Profit Repairman
“Not using share-shift marketing for greater sales growth. What I learned was this; share shifting is a term used to describe moving a client base from your competition, to you.
The advantages of share shifting over getting new customers/clients are: the want and need are pre-established, the client is already buying, so spending habits are historic, thus forecasting can be done for pre-qualifying their future spending consumption, having purchased from your competitor in the past, selling strategies on your product line’s advantages over your competition can be highlighted and exploited and lastly a pre-qualified database for quicker sales effectiveness, ramp up/your 'low hanging fruit'. ”
48. Andy Wibbels, Andy's Blog
“Not understanding the importance of lead generation. Not everybody is going to subscribe to your Twitter feed. Email alerts, people!”
49. Tim Clark, Entrepreneurship for Everyone
“I put an ad in the Wall Street Journal once, but all it drew was calls from other media reps eager to sell me more advertising. The money would have been far better spent traveling to an industry event or flying out to surprise some high-level prospects with an in-person visit. Lesson learned: You can't buy instant recognition.”Public Relations / Press
50. Kevin Dugan, Strategic Public Relations
“Scrub the date. Organized an event about eight years ago that took place in Tucson, Arizona. Organizing it from Cincinnati I was focused on many different details, including getting media coverage for the event...that was held on May 5th. Had I scrubbed the date of the event more thoroughly I would have realized that Cinco de Mayo was serious media competition for my event. It has since become a more nationally recognized event of course. Now I run potential event dates through a variety of calendars, looking at more than national holidays.”
51. Kevin Dugan, Strategic Public Relations
“Know the news to make the news. Hurricane Andrew had just ravaged Florida and my client sent a truckload of supplies to the affected areas. My job was to follow up on a news release touting this donation. Fresh out of school I did not stop to think that the last people I should be following up with were media in the affected area. Needless to say they made it clear to me that they had a more important job to do than tooting my client's horn. That hard-earned experience increased my view of the news and how to fit into the news cycle. ”
52. Kevin Dugan, Strategic Public Relations
“Is this news? My client had a new product to introduce at a trade show. It was a new version of an existing product...nothing earth shattering. At the time, I took my client's excitement for the new product at face value and set up a press conference during the show to introduce it. The press conferences were all held in a room with more than 50 chairs and a podium. The room was seemingly empty when we finally had the event. It was not an announcement worthy of having a press conference. More than five years later, I finally had news that was worth holding what would be the second press conference of my career. It was standing room only and I've only held three press conferences in my 17 year career.”Blogging
53. David Meerman Scott, Web Ink Now
“I started blogging in 2004. I wish I had started earlier.”Customer Relations
54. Chris Brogan, ChrisBrogan.com
“Both my business mistakes are essentially the same. I thought I should hide some internal issues from my clients, and just fix the problems, and in both cases, the issues blew up in the clients' faces in a not-so-good way. It took a lot of apologizing and soothing to get those relationships reconnected, all because I felt I could manage the internal issues before they became external. Now, I know to inform a bit faster.”
55. Chris Garrett, Chris Garrett on New Media
“Not following up. Past, happy clients can be your biggest source of new work, both with repeat business and referrals. Always get at least a testimonial when they say how happy they are. Even better if you can get them to recommend you. It doesn’t hurt to ask! Also it can be nice to send birthday cards, etc. You never know.”
56. Chris Garrett, Chris Garrett on New Media
“Over-committing. No one client has the right to monopolize your time, even if they do think they are paying well. When one client takes all your time that is a boss and you have a job, not a client and freelancer relationship. Remember as well as the job at hand you need time to market and network to bring in future work. Allowing one customer to dictate my hours was the worst mistake I ever made as when that contract was over I had nothing to fall back on. You ideally want to have four or five overlapping contracts plus some breathing room so the loss of one doesn’t set you back too far.”
57. Mark W. Shead, Productivity501
“I had a client where I rarely interacted with the CEO of a small company. Most of my work was done with people who reported to him. Eventually they cut back my contract because the CEO didn't really understand what I was doing for their company. The rest of the staff protested, buy the fact that I hadn't developed a strong relationship directly with the CEO cost me some business with an established client.”Partnerships
58. Steve Pavlina, StevePavlina.com
“Assuming a signed contract will be honored. I’ve made this mistake more than I care to admit. I’ve had signed contracts with supposedly reputable corporations, and they weren’t worth squat when the CEO decided he wanted out of the deal, even for completely dishonorable reasons. Sure I was in the right, but did I want to go to court to enforce it? No, I’d rather continue doing meaningful work.”IV. Operations
Mistakes discussed in this section include:
- Doing It All
- Hiring Employees and Contractors
- Expanding the Business
- Saying No
- Roles and Expectations
59. Gretchen Rubin, The Happiness Project
“Taking too long to hire a virtual assistant. I knew I needed help, but I just couldn’t get myself to take the steps necessary to find the right person. Once I identified her, my productivity and happiness at work shot up.”
60. Celine Roque, Frugal Pinoy
“Doing everything myself. When I started my online business, I did everything myself. It’s perfectly normal to start a business as a one-woman show. The problem was that it stayed that way for 3 years.”
61. Cindi Leeman, WALK Magazine
“I tried to do everything myself instead of hiring help. For example: I wrote features, did the layouts, updated the mailing list, did the bookkeeping, updated the website, etc. I was spread too thin and wasn’t doing any of it well. It would have been worth the money it cost to hire help in order to have the extra time to meet my publishing deadlines.”
62. Carson McComas, WorkHappy.net
“Thinking I could do it all myself. As an entrepreneur there’s a strong tension between wanting to be in complete control of a your own destiny, and the need to involve others if you plan to accomplish something great. After hearing the horror stories of bad partnerships I pursued a great challenge on my own, and had no one to check me on my personal failings, support me when I needed it, and lighten the load. Being a successful startup is hard enough, you need to be willing to surrender some control (and some imagined income) if you’re serious about success.”Hiring Employees and Contractors
63. Jonathan Salem Baskin, Dim Bulb
“I thought about people's roles, not functions. A small business relies on individuals usually doing a lot of different things, and I made the mistake of hiring people to fit titles, like 'sales,' versus really exploring their behavioral make-up. It taught me to look beyond the resumes and recommendations, and focus on the 'what' and 'how' of the functions we needed to get done.”
64. Jeff Cornwall, The Entrepreneurial Mind
“My second worst mistake was in how I hired people for our management team. During our initial period of rapid growth, I focused too much on their technical skills and experience and not at all on their fit in our culture. Our culture soon began to drift away from what we had intended, which hurt customer relations and employee morale.
In retrospect I realized that their technical skills should have been the baseline requirement, as they are necessary for success in your business, but not sufficient. I learned that the cultural fit of prospective employees is the strongest predictor of someone’s long-term success within a privately owned business. – strong technical skills and experience never are good enough by themselves.”
65. Rich Brooks, flyte blog
“Not doing the proper reference checks on a freelancer, and then giving him too much work too quickly. He disappeared, and we had to scramble to repair the damage he had done. Now, even if I'm really impressed by a freelancer I will start her out on a small project. It's kind of like a first date, where we're just getting to know each other. Better to turn down a project than staff it with the wrong people.”
66. Michael McLaughlin, Guerrila Consulting
“My two worst business mistakes weren't about business strategy or tactics, but people. In an effort to build my business quickly, I made a hiring mistake. I was warned by others that this was a risky decision, but I hired the individual anyway.
When it became clear that I'd made a mistake, I made matters worse and made another mistake: I held out hope much longer than I should have that the individual would eventually work out – he didn't.
I learned that poor decisions can compound over time. It's good to be decisive, but it's essential to be willing and able to recognize your bad decisions and deal with them quickly.”
67. Neil Patel, Quick Sprout
“If you really want to grow your company, you will need employees. You’ll probably post some job openings to find these employees or ask a few friends if they know anyone that you could hire. No matter how you get your applicants, go through each person with a fine-tooth comb. If a friend recommends someone, it doesn’t mean that they’re a good hire.
I made this mistake multiple times by hiring developers, designers, and sales people that friends recommended. Just because someone did well at their last job, it doesn’t mean they will do well working for you”
68. Neal Frankle, Wealth Pilgrim
“I felt comfortable with my ability to help people manage money. But I didn’t even think about the other skills I needed such as hiring and managing employees. For years I hired the wrong people and failed to train them. If you ever watch Sponge Bob, think Mr. Crabs and you’ll get a clear picture of my management skills. As a result, I had to work longer and harder and I wasted tons of money.
It’s great to be in touch with your positive traits, but you also have to be aware of your limitations. Recognize what you don’t do well and get help. If not, you’ll face disaster – soon and certain.”
69. Stacy Karacostas, SuccessStream
“Years ago, I made a couple of HUGE mistakes when I hired my first bookkeeper…Although I was referred to her by someone I knew, I didn’t really do my due diligence. And since I didn’t know my way around QuickBooks I also didn’t check very closely to see if she was doing her job as promised. After about 9 months I discovered she wasn’t. It took me two more bookkeepers, two years of time (a bunch of gray hairs) and about $3500 to get it reasonably straightened out so I could actually track revenues vs. expenses.”Expanding the Business
70. Jonathan Fields, Awake At the Wheel
“Don't open new locations, license or franchise until you've proven and refined your model, you know it's systems (not rockstar) based… and it's profitable. I jumped the gun once and ended up not only in debt, but hurting the core business. It took nearly 2 years to get flagship location back on track and debt-free.”
71. Blake Squires, Playaway
“When I began a previous start-up, I underestimated the company’s growth and had to move four times before I finally leased too much space.”
72. Michael Grossman, Castle Aviation
“I've always wanted to build a charter aircraft business. But I got caught up with growth and lost my balance with debt. It all started after 13 years in business when I had several small planes, all worth about $125,000. One day, a salesman sold me on his ability to help me secure financing for my first $1.2 million Cessna Caravan. It changed everything. Once you start growing, it's hard to stop.”Saying No
73. Chris Garrett, Chris Garrett on New Media
“My biggest business mistake that I keep making still is forgetting that I have the option to say 'No'. While it is good to be generous, and we sometimes fear turning people down, some of my worst situations have been where I could have said no, refused, or turned someone down and I didn't.”
74. Neil Patel, Quick Sprout
“A lot of good opportunities will come your way and your gut reaction will be to do them all, but don’t. I made this mistake and what ended up happening is that all of my businesses suffered, even the ones that were doing well. Within 3 to 6 months of me spreading myself too thin all my businesses suffered because I hadn’t spent enough time on each of them, even though I had employees and business partners who were helping me out. Remember, no matter how big or small your business is, you have to spend all of your time on it.”
75. Brian Lee, Genius Types
“Just say no. After I graduated, my brother and I started a 'dot com.' Our idea was to make a website where a user could customize their own motivational poster. We would offer a number of photos, quotes, borders, and colors; leaving the decisions up to the consumers. Our business never got off the ground and I was left with a pile of debt. I could have produced the same website without all the crazy equipment. Plus, it would have been perfectly reasonable to rent or sub-contract some of those functions until our system was proven.”Roles and Expectations
76. Gretchen Rubin, The Happiness Project
“Not understanding that I was already doing someone else’s job. Once I got a promotion and realized that I’d already been doing two jobs: mine and my boss’s. Now I try to make sure to understand the roles of the people around me.”V. Big Picture
Mistakes discussed in this section include:
- Being the Owner
- Trusting People
- Giving Up Control
- Admitting Mistakes
- Self-Confidence and Awareness
- Work-Life Balance
- Business Life
- Problem Solving
77. Becky McCray, Small Biz Survival
“Another huge business mistake I've made is not the result of one big action. It's the accumulated damage of not doing enough of the right things. Not marketing as much as the business needed, not keeping records the way I should, or not following up as much as I ought to. It's a matter of discipline, and I think we're all susceptible to it. I've learned it's the little errors in judgment, compounded every day, that kill you.”
78. Chris Garrett, Chris Garrett on New Media
“This might seem strange, but some of my biggest regrets were when I was too afraid to say 'Yes'! If we do not stretch ourselves, break out of comfort zones, then we shrink, our confidence droops, and opportunities dry up.
So I would say learning the appropriate use of Yes and No are the biggest lessons I have learned from my own business mistakes.”
79. Andy Wibbels, Andy's Blog
“Forgetting my online shopping cart was in test mode and losing lots of sales. I learned to quadruple check everything yourself!”Trusting People
80. Anita Campbell, Small Biz Trends
“My #1 biggest business mistake has been 'trusting too much.' Don’t get me wrong. I believe in trust – and most of the time people deserve your trust. Unfortunately, sometimes as a business owner you can trust too much.
For instance, I have trusted employees and service providers who claimed to be capable of a particular skill, but it turns out they were not. I trusted and trusted and trusted – only to find myself, my business and the rest of the team behind the 8-ball, all due to one person letting us down and then discovering it at the last minute after weeks or months went by.
This has NOT dissuaded me from trusting others, but it has caused me to be more hands on. I now live by the motto of a mentor of mine who used to say: 'Inspect what you expect.' Now I know WHY he used to say that.
You must regularly ask questions and inspect what people are working on. Don’t just sit back and blindly trust. The success of the business and other employees’ livelihoods are riding on it – so make sure you don’t let things go on too long without requesting status reports, demanding to see demonstrations or drafts, and being tough about getting answers to your questions. Don’t be afraid to make personnel changes if necessary. Get involved! That’s what leaders do.”
81. Seth Godin, Seth Godin's Blog
“Trusting the wrong people. Pay as you go is a great mantra. Your partners should earn your trust and their equity. Stuff happens, organizations change, people find different agendas. Carrying someone later because you didn't have the guts to bring it up at the start is painful.”Leadership
82. Danielle LaPorte, White Hot Truth
“In order to look more evolved, cool, compassionate, and generally 'nice', I opted for a 50/50 consensus model rather than taking charge and being a true leader. (Even if you're a natural leader, leading isn't always naturally easy.) Consensus can often lead to mediocrity. If you round off the edges of your best ideas, you get mush. The buck has to stop with someone. I learned that domains of responsibility are the way to go in partnerships and teams. It calls everyone to lead, to stay sharp and it builds trust.”
83. Jeff Nickles, My Super-Charged Life
“I learned the hard way that it is always better to be patient and work peacefully to convince people that your way is the best way rather than trying to exert your actual or perceived position power to get things done. It is a small world. When we upset someone or threaten their domain, we risk having it come back to bite us later. I also find that by working with people, especially those that disagree with me, the joint solution usually turns out better than what I had in mind to begin with.”
84. Cindy Powers, Power in Motion
“I wanted the staff to manage the front office with little or no involvement from me. I wanted to concentrate on patient care. It was completely unrealistic.
Employees have an expectation, a need and a desire for leadership from their employer. When that doesn't occur, everything falls apart.”
85. John Osher, Cap Toys Inc.
“Accepting that it's 'not possible' too easily rather than finding a way. I had an engineer who was a very good engineer, but with every toy we developed, he would say, 'You can't do it that way.' I had to be careful not to accept this too easily. I had to look further. If you're an entrepreneur, you're going to break new ground. A lot of people are going to say it's not possible. You can't accept that too easily. A good entrepreneur is going to find a way.”Giving Up Control
86. Danielle LaPorte, White Hot Truth
“I made a lame deal with my last book publisher to retain creative control and therefore look after the design costs. It was a hugely expensive mistake of naivete and creative will – as if our giant publishing conglomerate was going to really give us creative control. They called all the shots while we foot the bill. Lesson learned: keep the cash, know where you stand next to Goliath, and pick your battles of integrity.”Admitting Mistakes
87. Chris Guillebeau, Art of Nonconformity
“I once sent the wrong order link to an email list with 80,000 subscribers, then didn't notice the problem for three days. Oops. To remedy it, I sent a new message to the list with the subject line 'Sorry, I am a complete idiot.'”Self-Confidence and Awareness
88. Rich Brooks, flyte blog
“Took an attack too personally. Someone slandered my company in an email that went out to ad agencies in town. I wrote an angry blog post defending ourselves and slamming this person. Luckily, a cool headed employee read the post first and said, 'I'm glad you got that out of your system. Now hit delete.' These days I realize that there's always going to be people like that out there, and it's best to ignore them and concentrate on building the best company you can.”
89. Seth Godin, Seth Godin's Blog
“Not believing, not risking, not deciding. Holding back feels like the safe thing to do. When someone asks you your big mistakes, it's tempting to talk about the stuff you did that didn't work out. But what about the stuff you DIDN'T do? Those are the really big mistakes. Not starting Yahoo! or Google, those were big mistakes. Not embracing potentially great hires or exploring fantastic new venues...”
90. Valeria Maltoni, Conversation Agent
“Listening to my boss despite knowing better and going down the 'let's be all things to all people' in branding. It was a disaster. Our budgets were stretched across multiple services and messages and we did not get the lift desired. I learned to trust myself better and to make a stronger case for doing the right thing. The other options of course is that you should walk away from poorly thought out plans. Beware of putting titles before your experience and skill.”
91. Harprit Singh, Intellicomm Inc
“Thinking too small. A few years ago, my colleague and I drove hundreds of miles to give a presentation on our service to one of the leading global insurers. I could clearly see the excitement in our service quickly dwindle in the packed conference room when we mentioned that we are a small business with limited resources. From that day on, I vowed never to let our size hold us back.”
92. Valeria Maltoni, Conversation Agent
“Accepting to work in an ill-defined position with lots of dependencies and turfs. No good came out of it and I quickly moved on. The lesson here is that you should always make clarity on expectations and contributions. Whether that be a contract or project with a new client or a job, you should look to set parameters for what success looks like and how freely you can move towards it. Beware of being too eager to please, the price is often too high.”Work-Life Balance
93. Lynette DeNike, AllBusiness.com
“After a few years managing marketing launches of Silicon Valley start-ups, I joined a re-launch team for a Chicago company with high profile Valley funding and brought my work-is-life's-first-priority ethic with me. Yep, there was cultural oil and water in the Midwest. While I continued to work like a maniac, I learned to accept that it is okay for other people to have different priorities in their lives.”Day-to-Day Business Life
94. Lynette DeNike, AllBusiness.com
“On my first trip to Taiwan, I was invited to speak before a large audience of engineers. I asked a female executive, who travelled to Asia frequently, about Taiwanese traditions. She didn't mention that white is the traditional color of mourning. The audible gasp from the audience, when I walked on stage in my white suit, shocked me. A Taiwanese colleague whispered (to me) what the problem was and I immediately apologized for my ignorance. The audience laughed with me, and we continued. Always consult a cultural expert about large and small details before travelling to another country.”
95. Liz Strauss, Successful Blog
“Years ago, I took a meeting for a job at face value. The job involved helping a big firm with one of their clients. We had a conference call and discussed my background, their client, and job required. During that call we put together what the meeting agenda would be, but that's not anything close to the meeting I attended. When I arrived I was invited to sit anywhere I chose at a conference table. A group of 8 people enterred one at a time and all choose to sit across from. This was a meeting to see whether the person who had selected me for the client had done her homework. I was being interviewed ... more like interrogated. It was an unpleasant waste of time for all of us.
What I learned from that was that I should always know the people I'm meeting with, not just what we're supposed to be meeting about.”
96. Chris Guillebeau, Art of Nonconformity
“I ignored problems in the hope that they would magically resolve themselves. Most of the time, unfortunately, this doesn't happen.”
97. Jonathan Salem Baskin, Dim Bulb
“I analyzed things too much. If you ask enough people the same question, you'll usually get enough answers to lose sight entirely of the problem you wanted to solve. I wanted to be 'right,' so I learned how to parse challenges into smaller pieces on which I could take more immediate action. Nothing vets an idea better than the reality of experience.”Networking
98. Tim Clark, Entrepreneurship for Everyone
“Blowing off repeated e-mail entreaties from Hiroshi Mikitani to explore a partnership back in 1995. He went on to create Rakuten, Japan's biggest online shopping mall. Lesson learned: never blow off solicitations from a guy who's about to build a billion dollar company.”
99. Anna Farmery, Buzz Networker
“Networking needs investement, the good news is that it is in terms of time not necessarily money. My biggest mistake was a lack of focus… and a over enthusiastic idea of what I could achieve on a daily basis. If you want your network to grow then focus…and be consistent in your networking commitment.”
100. Anna Farmery, Buzz Networker
“Not focusing my networking efforts. In my early days I got carried away with all the new social media tools and joined EVERYTHING and even tried to keep very active at all the sites. Great strategy if you want to get burned out.”Change
101. David Meerman Scott, Web Ink Now
“Early in my career, I lived in Asia for nearly ten years working for American companies. It was a terrific experience, but I stayed a few years too long because it was tough to assimilate back into American business upon my return.”
Thanks to all our respondents who candidly shared their mistakes and lessons so we can all learn from them.
So which mistake/lesson resonates with you? Share your own mistakes and lessons in the comments!Photo credit: iStockPhoto