The famous playwright Oscar Wilde summed up the essence of experience when he stated that, “Experience is simply the name we give our mistakes.” And it’s a given that anyone starting and running a business is going to make mistakes.
New businesses require skills in a wide variety of disciplines: From accounting and strategy, to marketing and legal; from human resources to product/service design. And as businesses grow in people and resources, company founders gain the ability to delegate some of these roles.
But, in the beginning, most CEOs are involved in virtually every aspect of their business.
If you’re one of them, and you have expertise in, say, one or two areas, the broad range of questions you must answer – with little or no prior experience to draw on – burdens those first few years of running a business with challenges. It’s no surprise, then, that 80 percent of all business fail in the first 18 months.
For any new entrepreneur competing against these odds, nothing is more critical than shortening the learning curve and getting your business on solid financial footing.
Here are six common mistakes first-time business owners should avoid to improve their chances of success:
1. Leave your ego at the door
Success in business is often nothing more than making a series of good decisions. The catch is that consistently selecting the best choice isn’t easy to do. And despite common perception, one of the biggest roadblocks to good results isn’t a lack of information or skill, it’s a leader’s inability to put aside his or her ego.
In short, outstanding leaders are willing to be wrong. They develop the ability to select the best idea, regardless of the source.
If you want to be successful in starting a business, invite input and keep an open mind. If you can do that, you’re much more likely to do what’s right for your business.
2. Don’t treat everyone the same
Learning to manage people is a skill that takes time to acquire; it’s not something you’re born with. One of the common misconceptions about management is that leaders should have a particular style and require others to conform to it. Nothing could be further from the truth.
Regardless of your business, your employees are your most important asset. As a leader, your job is to get the most out of them, and the best way to do that is to understand them as individuals. So, take time to identify how to motivate each one and become aware of how he or she responds to your input.
If you can adapt your style to align with what works best for each individual, you’ll dramatically impact his or her performance.
3. Don’t hire too quickly
Big companies have the luxury of significant resources, allowing them to invest in the hiring process. Typically, they put candidates through multiple hiring interviews, as many sometimes as eight or nine. Why spend so much time with a simple hire?
These companies understand that the cost of hiring the wrong person is a significant waste of money and time. Small companies, in contrast, commonly limit interviews to the candidate’s prospective manager, and maybe the CEO. Don’t fall into that trap.
When you’re small, every individual can have a disproportionate impact on your business.
How these people fit in with the team, the alignment between their skills and the job’s requirements and whether they buy into the company vision are all critical to creating a dynamic and powerful team. So, vet your candidates thoroughly, and if you can hire them as consultants for a few months to “try before you buy,” that’s even better.
4. Admit your weaknesses
Even the most talented people have strengths and weaknesses. One of the easiest mistakes a new CEO can make is to ignore those shortcomings.
Maybe you were good at math, so you figure you can handle your company’s accounting. Or, you took a business-law class while getting your MBA and you think you’re somehow qualified to review simple legal agreements.
The best executives know what they do well and what they don’t. And their key hires and valued consultants provide valuable input in areas in which they lack experience. Don’t try to be a superhero.
5. Spend time planning
Most new businesses start because the founder or team has strong expertise in a specific field. That’s a great advantage because it cuts your learning time dramatically. But making the leap from the role of practitioner or product engineer to running the entire company is significant. So, take time to plan.
In the immortal words of Benjamin Franklin, “If you fail to plan, you are planning to fail.”
6. Consider that alignment, not consensus, is the goal
Successful teams exhibit numerous behaviours: Shared vision, passion for the work and honest communication, to a name a few. But many small teams incorrectly assume that everyone’s being in agreement is always optimal. What’s more, those teams will compromise the best solutions in order to gain consensus.
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That may be understandable; but it’s the wrong way to run a company. Encouraging robust debate and thoroughly vetting competing viewpoints is the process that usually yields the optimal result.
As long as detractors are on board and the team aligns around the plan or vision, differences of opinion, not consensus, should be the goal.
This article was originally posted here on Entrepreneur.com.
Put On Your Wellies: It’s Time To Wade Into Risk
Entrepreneurs aren’t all leaping into the unknown like lemmings off a cliff, but they do need to consider it…
You’ve had a great idea. You’ve looked into its development. You’ve recognised that it has potential beyond just what Auntie Mabel and Mike From The Grocer think. And you’ve clearly nailed a pain point that can make money. Now it is time to take the risk of running with it.
Every big idea comes with risk. You can’t step out into the world of entrepreneurial thinking and business development without it. Your idea may fail. It will also be time consuming, demanding, hungry for money, and hard work. It is unrealistic to expect that your project will leap out into the world and be an unmitigated success.
It is also unrealistic to assume that it isn’t worth taking this risk.
There are steps that you can follow to ensure that your risk is managed so you aren’t blindly leaping off that cliff…
Step 01: Do your research
No, canvassing your neighbours, friends and family is not doing research. You need to know that your idea will appeal to a broad market and that it will have significant legs. This may sound like daft advice, but you would be surprised how many people think an idea will take off just because Susan in Accounting said so.
Step 02: Understand the costs
Projects are hungry for money and investment. Realistically work out your budgets and how much it will cost to take your project off the ground and then stick to it.
A calculated risk is a far better bet than one that shoots from the hip and hopes for the best. You can also use this as an opportunity to draw a clear line under where you will stop investing and end the project. If it keeps eating money and isn’t getting anywhere with results you need to be able to walk away.
Step 03: Know when to walk away
As mentioned before, this can be defined by a line you’ve drawn in the proverbial sand (and budget) but no matter where you draw this line, you have to stick to it. Often, when time, money and energy have been poured into a project it can be incredibly hard to walk away.
You think ‘but I have put so much into this, just one more’ and then it gets to a point where the ‘just one more’ has taken you so far down the line that walking away feels impossible. Leave. Learn the lessons. Apply them to your next project.
Mind The Gap
The entrepreneur’s guide to finding the gaps and building the right solutions.
Innovation may very well be the key to business success but finding the gap into which your innovative thinking can fit is often a lot harder than people realise. Some may be struck by inspiration in the shower, others by that moment of blinding insight in a meeting, however, for most people finding that big idea isn’t that simple. They want to be an entrepreneur and start their own high-growth business, but they need some ideas on how to find that big idea.
Here are five…
It sounds trite but networking is actually an excellent way of picking up on patterns and trends in conversation and business problems. The trick is to note them down and pay attention. Soon, you will find patterns emerging and ideas forming.
2. Look for pain
Just as networking can reveal trends in the market, so can spending time reading. The latter will also help you find common business pain points. These are the touchpoints that frustrate people, annoy business owners, affect productivity, or impact employee engagement.
Be the Panado that fixes these pains.
This is probably the most annoying of the ideas, but it is unfortunately (or fortunately) very true. Luck does play a role in helping you capture that big idea. However, luck isn’t just standing around and random people offering you opportunities. Luck is found at networking events, it is found in research and it is found in conversations with other entrepreneurs.
4. Luck needs courage
You may have found the big idea through your network, a pain point or pure blind luck, but if you don’t have the courage to take it and run with it, you will lose it to someone else.
Being bold in business is highly underrated because most people assume that everyone is bold and prepared to take big leaps into the unknown. However, not all brilliant entrepreneurs were ready to throw their family funds to the wind and leap into an idea – they were courageous enough to figure out a way of harnessing their ideas realistically.
5. Pay attention
This is probably one of the most vital ways of finding a gap in the market. Often, people are so busy that they don’t really pay attention to that niggling issue that always bothers them on a commute, or in a mall, or at a meeting. This niggling issue could very well be the next big business opportunity. Pay attention to it and find out if that issue can be solved with your innovative thinking.
5 Things To Know About Your “Toddler” Business
As you navigate this new toddler phase of your business, here are five things to bear in mind.
Ah, toddlers. Those irresistible bundles of joy bring a huge amount of energy, curiosity and fun to any family – but there’s also frustration and worry that comes with their unpredictability, as they grow and start to become more independent. If you own a business and it’s successfully past its “infancy” of the first year or so, it’s likely it will also go through a toddler stage of its lifecycle.
Pete Hammond, founder of luxury safari company SafariScapes, agrees with this. “Our business is now three and a half years old, and we’ve found that we’re not yet big enough to justify employing a large team of people to handle the day-to-day admin tasks, yet we still need to grow the business as well,” he says. “As a result, our main challenge is finding the time to step back and see the bigger picture. Kind of like when you are raising a busy toddler and you spend most of your time running after them!”
As you navigate this new toddler phase of your business, here are five things to bear in mind:
1. This too shall pass
Everything in life is temporary – and that goes for both the good and the bad. It’s as helpful to remember this when you’re facing the might of a toddler temper tantrum, as it is when you’re facing throws of uncertainty in your business. If your new(ish) venture is going through a rough patch in its first few years, it can be easy to think about giving up – but don’t. As long as you have an overall big idea that you believe can add value to your customers, keep pushing through the rough parts until you come out the other side.
2. Appreciate what this phase brings
The toddler years mean that the initial newborn joy is officially behind you. But these small humans also bring their own kinds of joy, as you watch them learn new skills, say funny things, and give affection back to you. While your two-year-old business may not hold the same exhilaration for you as it did during those first few months, there are now different things to appreciate about it: Maybe you’re expanding your product range, or employing new people who can take the workload off you.
3. Establish boundaries
Toddlers thrive on boundary and routine – and your toddler business will too. As it grows into a new phase, try and establish limits in terms of the type of clients you want to work with and the type of work you’ll do. It’s also a good idea to make a decision about the hours you’ll work and when you’ll switch off, which will help you establish a good work-life balance.
4. Take a break
Every parent with a toddler needs a break every now and then, even if that means a walk around the block (on your own!), a dinner out with friends, or even a few days away. The same is true for a demanding small business: every so often, remember to take time out to rest properly, where you switch off your laptop and completely unplug. You’ll return much more inspired and resilient to deal with the everyday uncertainty that it brings.
5. Give it space to make mistakes
While the unpredictability of a young business can be stressful and tiring, it’s also a time for trying new things without the risk of huge consequences if they don’t quite work. After all, it’s much simpler to change your USP if you’re a small business employing a few people, rather than a big company where 50 people are relying on you for their salary, or where you’ve received a huge amount of investment capital. While you may fail in some of the things you try with your business (in fact, this is almost guaranteed), see it as a toddler that’s resilient enough to pick itself up, dust its knees and keep moving forward.
During this phase of business growth it’s also essential to have the right type of medical aid cover. There are medical schemes such as Fedhealth which has a number of medical aid options and value-added benefits to ensure that your health and wellness is taken care of too. After all, the healthier you and your staff are, the more productive your business will be – during the toddler (business) stage and beyond.
While this phase can be frustrating, it’s a sign that your business is growing and adapting, rather than remaining in its infancy, and that can only be a good thing! So embrace the difficulties, learn from them, and watch as your business strides forward confidently into the next exciting phase.