Entrepreneurs begin with an idea for a service or product nobody has thought of. Before long, they become successful due to great word of mouth and an overall excellent reputation. Sounds easy, doesn’t it? One of the biggest problems with this plan is it doesn't necessarily match up with reality.
Not everyone is a born leader. Business plans take more time and attention than you'd imagine. Financing is difficult to obtain. Achieving the dream takes a lot of hard work. At my company, I help a lot of new entrepreneurs, so I've done research on what works...and what doesn't.
Here are the five most common mistakes to avoid:
1. Spending too much or too little money
Ben Franklin might have stressed that a penny saved is a penny earned, but saving pennies is daunting and nearly impossible in the early stages of entrepreneurship. Small businesses require capital to cover many expenses like new equipment and staff. Many businesses look into using seed capital, angel investors or lines of credit.
Prioritize your needs and decide which expenditures will be best for your new company. This paves the way for later success. So spend a little extra on an IT pro who specializes in Adobe or buy a new computer with more memory if these things are going to be important to your business. It will pay off in the end.
On the flip side, if you have a lot of money and are ready to spend, spend, spend...don’t. In many ways, you’ll have to work like you don’t have the money and stick to a budget. Spend only if necessary to achieve goals. By skipping lavish flash sites or state-of-the-art offices, you’ll be able to save for the months (and years) ahead. If you spend right, you'll be prepared if your business suffers a dry spell.
2. Ignoring the Internet and social media
Facebook? Twitter? Blog? Anyone? Bueller? I’ve heard it all before: We don’t blog because we have more important priorities. We’re working on creating a blog but don’t think anyone will read it. Using Facebook is a chore. And what’s a Twitter?
Blogs and social media are the easiest and most affordable methods of getting your brand name out there, yet many businesses ignore them. Social networking gives you the chance to share the latest news from your business on Twitter or Facebook along with more in-depth updates on your company blog.
The best part is that all of these resources are free, and virtually everyone in the world has access. Finding connections is easy, hassle-free and, dare I say, fun. You’ll be able to connect to others in a fresh way.
3. Behaving like Bill Lumbergh and Miranda Priestley
In "Office Space," Bill Lumbergh is the boss, who, in a monotone drawl, intones terrible requests to his employees. "I almost forgot. Ahh, I'm also gonna need you to go ahead and come in on Sunday, too." Contrast that with The Devil Wears Prada, which shows Miranda Priestly being hell on heels, humiliating and insulting her staff.
When running a small business for the first time, you may feel inclined to behave in a new manner with your staff. You're trying to be professional, authoritative and "cool" at the same time. It can be easy to sometimes lose your natural self to a wound-up version of you.
These are the two worst types of bosses to become. The Lumberghs are completely oblivious to employee dissatisfaction, whereas the Priestleys are on power trips that send good employees packing. Both make for an unhappy work environment. Be yourself and train employees carefully in their new positions. Offer weekly team-building activities and incentives to keep morale high.
4. Thinking you can do it all
There’s a distinct difference between having it all and doing it all. Having it all allows for more breathing room. Doing it all may involve you dropping dead at 34 from being overworked and exhausted, running on all cylinders until you can’t run anymore.
You won’t be able to do everything. But it's perfectly natural to want to, especially when a business grows. You’ll have to outsource your tasks to staff, which you may not want to do at first (what if they don’t do as good a job as me?). But it will become necessary, as your responsibilities mount up.
5. Forgetting that the customer comes first
The customer should be the world your business revolves around. They’re the deciding factor for how well your business thrives or how quickly it burns out. They get the word of mouth going. Listen to your customers and give them what they want. They’ll remember this and promote you in their social circles. There’s a reason why the motto of so many small businesses is (and should be): Customer satisfaction, guaranteed!
OPEN Cardmember Deborah Sweeney is the CEO of MyCorporation, a company that specializes in helping to form an LLC or corporation.