Selecting the wrong partner – It’s impossible to build something great alone. The right partner will help you succeed. Your ideal business partner will compliment your skills. If you are an introvert with no sales experience and your business can’t succeed without strong sales skills find a partner with the necessary skills.
The greatest challenge with partnerships is that they can kill your business.
No amount of passion will repair the damage bad partnerships cause.
Business partners don’t have to be friends. Neither will they agree on everything. Larry Page and Sergey Brin quarreled all the time as they were starting Google.
Evan Williams and Biz Stone started out as rivals, but in 2006 they started Twitter.
You don’t have to be, but it helps to be friends. Bill Hewlett and Dave Packard were best friends with similar strengths and management styles, they complemented each other.
Lack of financial intelligence – You don’t have to be a CPA to understand your financials. If you don’t understand your P & L, your balance sheet, or your cash flow statement, sit down with your accountant and ask.
Understanding your financials helps you keep your finger on the pulse of your company’s fiscal health.
Fooling yourself with vanity metrics – Vanity metrics will feed your ego and destroy your business. Vanity metrics are meaningless because they don’t help you make good decisions.
Wanting to be the smartest person on the team – If you are serious about building a successful business you must have the help of people smarter than you.
Entrepreneurs who fail have all the answers.
They want to be the superhero of the company. They want to solve all problems.
They want people around, but only as long as they fall in line with the others and are willing to follow the leader.
Micromanagers never build valuable teams.
Solving problems that don’t need to be solved – Entrepreneurs who fail come up with solutions for problems that don’t need to be solved.
If you develop software because you “know” it will do great things you will fail.
You could spend two years coding something nobody will want.
Solving problems that don’t need to be solved is just another form of cowardice.
You don’t know what other people want. The only way to find out is by asking.
Lack of sales – No amount of enthusiasm will make up for too little sales.
Well-Established Business Mistakes
Employing the wrong people for too long – It’s difficult to fire people. Entrepreneurs who fail to fire the wrong people will fail. Small businesses especially can’t afford to carry the wrong people. They will bring down the performance of the entire company. The most successful entrepreneurs hire slowly and fire quickly.
Taking customers for granted – I love it when I call a business and the auto attendant recording lies to me about how important my call is to the company, just to keep me on hold for 10 more minutes.
Getting fat and lazy – Business is cyclical. When times are good it’s easy to be complacent. The companies that allow themselves to become complacent will be the first ones to fail as the economy slows down.
Resisting business trends – There are few bigger missed opportunities in business than Kodak’s. It wasn’t an overnight failure.
Kodak had decades to transition from film to digital photography.
Kodak made a series of choices (mistakes) that set them on course for bankruptcy.
Steve Sasson, a Kodak engineer, invented the first digital camera in 1975. You would think Kodak management would jump up and down, celebrating Sasson’s invention.
Kodak management dismissed the digital camera as “that’s cute – but don’t tell anyone about it”. For decades, Kodak management failed to see digital photography as a disruptive technology.
Please share your thoughts about the costliest mistakes entrepreneurs make in the comments section.