One of the most important business lessons you can learn is what not to do. Having spent years building, refining and selling businesses, I've compiled my list of indicators that a wanna-be entrepreneur is headed down the path to failure.
Why is this so important? So we can learn from others' mistakes and stay on the track that leads to success.
The Road To Failure
Take a long, hard look at your behavior to make sure you're not making these entrepreneurial errors:
1. Asking “Why me?” instead of “Why not me?” Attitude is everything. If you examine your business and lament the obstacles you face and moan about your challenges, you’re starting out defeated. Struggles separate the victims from the victors, and if you face your obstacles with new ideas and a determination to find opportunities to succeed, then you’re on your way to becoming victorious. A positive mindset matters and can get you through tough times more often than not.
2. Thinking that great ideas are more important than relentless action. More than once, I’ve explained one of my business concepts to an acquaintance only to hear, “Oh, I had that idea years ago.” Being an idea generator isn’t going to pay your bills. Ideas are only seeds—they must be planted, nourished, tended, nurtured and harvested. It takes hard work to develop an idea into a profitable venture, and a marginal idea backed by hard work is infinitely more profitable than a great idea that no one puts any work into.
3. Focusing your efforts primarily on raising money than on making money. This distinction is a really important one. If you spend the bulk of your time and energy seeking out investors to keep your business afloat, you're most likely neglecting your opportunities to create—rather than borrow—money. If your business isn’t generating sales and income, then you have a problem that requires a solution bigger than one a mere investor can provide. Sales indicate a healthy business, and if you’re drumming up financial support, you can’t also be drumming up business.
4. Relying on your backup plan. If every business bet you make is hedged against the possibility that you may not succeed, then you’re setting yourself up to fail. Working without a net means that you have to succeed—you’re all in. If your financial survival depends on your success, then you're more likely to find a way to make your business work. Take a stand, and make it happen, rather than spending too much time planning for your failure.
5. Hiring quickly and firing slowly. People are the most critical component of your business. They’re the face of your company, and your connection to your clients and competitors. It’s essential that you take the time to vet and evaluate prospective hires to ensure they’re a good fit for you. Likewise, when you find that a staff member needs to go, it’s best to fire them right away, before they can negatively affect the morale of the rest of your employees and damage client relationships. Do your research ahead of time, and be decisive when it comes to hiring and firing.
6. Thinking that your target market is “anyone who …” Successful business owners can clearly specify exactly who their target market is. If you’re unsure about who your target is, then you’re unable to market effectively, collect feedback and adapt to necessary changes. Catering to a clearly defined niche market makes successful businesses relevant, and it lets them command top dollar for their products and services.
7. Doing minimum wage work. When you find entrepreneurs doing busywork or work that could be assigned to an employee who makes $10 an hour, then one of two things is going on. They’re either being foolishly thrifty—thinking they’re saving money by doing something themselves that they could and should be delegating—or they’re disregarding their value to the company. Ask yourself what’s in the long-term best interests of your company: personally addressing envelopes or personally meeting with an important prospective client? In the long run, your best investment may be in a support staff member who frees you up to use your unique skill set to its best advantage.
Correcting most of these mistakes comes down to a simple shift in your mindset. Thinking positively, creatively and practically will help you make better decisions for the health of your business and put you on the path to success.
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