A recent article over on Chief Executive on the 7 mistakes people make that kill their business made some great points, but when I saw the title, all I could think was only seven?
The article pointed out these 7 classic mistakes that so many business owners make that often result in the demise of their business:
- Doing Too Much Yourself
As the article notes, this will bog you down in day-to-day issues and fire-fighting and take you away from managing the core business and long term strategy. And considering you will not be well suited to many tasks, the opportunity costs alone are crushing!
- Not Recognizing You Don’t Know What You Don’t Know
It’s one thing to do something you’re not good at because you can’t yet afford to outsource it, but another to think that you’re effective at it (especially when you’re dismal). If you think you’re a great sales guy, but you’re the worst there ever was, you won’t stay in business long.
- Growing Too Quickly Before Your Model is Proven
Sometimes when sales pick up quickly, it’s only a blip. Ramping up too fast can deplete the accounts and bankrupt the business if the sales don’t last.
- Not Bouncing Your Ideas Off Of Seasoned Pros
Sometimes, when your track record is great ideas, it might be hard to spot the great idea that won’t work. Failing to do so can quickly lead you down the wrong track. But if you can talk to seasoned peers, you can catch these ideas before they do any damage.
- Bringing in the Wrong People
Many business owners hire in their own image — so the gaps are not actually filled. Too true. Others overvalue the wrong skill sets — like sales and marketing or services in a venture being built entirely on a technology platform. Others hire for the wrong reasons. I once worked for a manager who hired someone because they liked their cover letter. And while that would be a top requirement for a communications person, a developer only needs good communication skills — and coding / engineering ability should be the top priority.
- Lack of Self Awareness
The article notes that many owners refuse to face their fears and insecurities, often because they don’t trust other people, which is a key problem. You have to identify your weaknesses, bring in the people who are strong where you are weak, and trust them to do the job you hired them for. If you can’t, it’s over.
- Staying in the Comfort Zone
As the article points out, it’s easy to stick with people you know and understand – but there’s one downside, who’s challenging and testing your thinking. If all of your managers are ass-kissing yes-men, you might as well just pack it in now.
But what about these classic mistakes:
- Bringing in the Wrong Investors
If the investors don’t get your business, they’ll take you down the wrong path and lead you to a quick demise.
- Going After the Wrong Market
In many cases, this is the “market of one”. I’ve worked with a few start-ups where the entrepreneur said “we need a product/service to solve this problem”, and even though they were right, their view of the problem was very limited and their solution was only appropriate to the company they came from.
- Doing the Wrong Work In House
Some companies are afraid to build on anything not built in house, others try to use everything they can find in the public domain, whether or not it is appropriate to the problem at hand, and others try to do services they can be outsourcing.
Or the countless others that we’ve all seen kill many a good business over the last two decades?
Leave a comment below with your favourite mistake!