You want to avoid making the worst business mistakes, right?
More businesses fail than succeed. Businesses fail because entrepreneurs make too many mistakes. Some mistakes are small and others are devastating. You can’t eliminate mistakes from your business completely, but, if you are willing to learn, you can minimize them.
Here are some of the most common business mistakes:
Focus on profit.
Want to build a solid business? Focus on profit not revenue. Too many businesses focus on revenue instead of profit. Many businesses file for bankruptcy earning record revenues. Focusing on revenue instead of profit is a huge business mistake.
If you can get 10 new customers, but only 5 of them will result in profit for your business ignore the other five. For many entrepreneurs, it is tough to turn business down, but it is a mistake to take on unprofitable clients.
Yes, it’s true that if you are a venture backed startup you don’t have to worry about profits. The reality is that most businesses will never get VC money and most startups that get funded fail, anyway.
Follow through on everything.
Strong business relationships are as good as gold. Everything from product development to marketing depends on them. One of the best ways to keep your clients, partners, and colleagues happy is to follow through on everything. Whether collaborating on a project, presenting at a seminar, or giving an interview, you should always see your obligation from beginning to end. You should also have this expectation for others. Consider using a screening process for potential collaborations. This will prevent you from wasting your time with unproductive relationships. Always follow through on obligations and expect the same from everyone.
Make smart hiring decisions.
When it comes to hiring, too many entrepreneurs act before they think. Think carefully about the kind of person you need. What kind of background, experience, or skill set should this person have? Have a clear vision of what exactly you need, and only hire people if they match this vision. Discuss this process with your mentor, if you have one. Choosing your team wisely will keep your business poised for the future.
The smaller your team the less you can afford to make a bad hiring decision. Never rush into hiring. No matter how bad you need help in your business, take your time.
Unfortunately, you can’t always tell the good employees from the bad. Sometimes new hires that seem capable turn out to be incompetent. One of the worst business mistakes is neglecting to let go of bad employees. The longer you keep them around, the worse effect they will have on your business. You will also cause dissatisfaction among your good employees. Nobody likes to see bad behavior rewarded. Know when and how to weed out bad employees. If you make a mistake and hire the wrong person, act quickly. Let the person go fast, to minimize the damage done to your business. It is true that successful entrepreneurs are slow to hire a quick to fire.
Have a mission statement and core values.
You and your employees should know the “why” and “how” of your business by heart. Why are you in business? How does your business operate? Having a mission statement and a set of core values will help you and your employees answer these questions. Sending a clear message about your mission and values will ensure that you are functioning at 100%. All of your employees will operate under the same value system, and colleagues and vendors will know you mean business.
Have a mentor.
Many entrepreneurs try to build their businesses alone. The truth is that people at all stages of business can benefit from a mentor. Some of the most accomplished businesspeople could not have done it without support from experts in their fields. Find someone you trust with proven success in business-building. Try to open a line of dialogue. Is there an opportunity for mentorship? Some business experts even advertise their mentorship services. Reach out to experts you respect and find a mentorship that works for you. You will learn how to avoid the worst business mistakes, and you will benefit from your mentor’s wealth of experience.
When you reach out to a potential mentor avoid using the word “mentor”. You might scare people. Start out by asking questions. Try to build a relationship first.