One of the secrets of our success in growing a business from nothing (apart from having the most excellent Configure, Price, Quote people in the world!) is that we follow the advice of our COO, Lisa Zevi. Because she must have about three times the number of hours in her day than the rest of us, Lisa advises and guides other high growth businesses in addition to us. We’re very proud to share some of her wisdom in the form of a guest post on our blog.
10 Mistakes New Business Owners Make
Most people start out in business with a great idea or a particular skill - they don’t think about running a company or managing a team. Nobody ever tells you that the way you manage your business will make it or break it.
Here are 10 Mistakes New Business Owners Make that I come across all the time. How many of these sound familiar to you?
- Not having a plan– You have a great idea, you know what you’re doing, you’re prepared to take a risk – just get on with it. No actually, wait a moment! Without a plan, how will you know that you are on track? Without a plan, how will you be able to communicate progress? Without a plan, how will you know if you are veering off track?
- Believing your own hype– When you start a new business it is very common to believe that no one can do things as well as you – after all it’s your idea, your product or service, and no one else will ever understand or care as much as you. If you’re smart, you will hire people who will make decisions and challenge your ideas rather than simply do a job.
- Hiring too quickly and firing too slowly- Your team is the most important element of your new business ‘jigsaw’. Many business owners avoid hiring or getting help until they are completely overwhelmed, and then panic and hire the first person who crosses their path. One bad hire can seriously de-rail you, especially in the early days, so focus on finding people with the right attitude and values. Someone who is not right for the team will end up draining you and your business. If you get it wrong, end it quickly, professionally and humanely.
- Blurring the lines– If you do decide to go into business with a friend or a family member, make sure that roles and responsibilities, goals and financials are clear. Even though you are sure it will never happen, discuss how either of you would exit the partnership. Even the best of friends can fall out over an informal handshake where each person has a different memory of what was agreed.
- Selfish vision– Many owner-managers are so focussed on their goals that they fail to realise that their people are not with them. In order to buy into the future you can see, your team will need to understand you and why you do what you do. With all your passion and enthusiasm, customers will not immediately flock to your door, and even when they do find you, they may not immediately ‘get’ the uniqueness of your idea or product. Remember that this is not about you – it is about your customers and how you solve their problems.
- Lack of trust– You started off with such a great team – what happened? Effective communication is key to establishing and maintaining trust, but too often this is put into the ‘nice to have’ rather than ‘essential’ category. Your team need to understand what is happening in the business, they need to feel that they can contribute, challenge and collaborate. Make it part of your company’s culture to recognise and celebrate mistakes as learning opportunities.
- Poor cash management– It’s amazing how often new businesses run out of cash, even when they have revenues and profit. Especially in the early days, cash is very definitely king – you need to maintain a rolling 10-12 week forecast. By all means have an accountant to do your tax returns but keep a tight grip on expenses, especially in the early days. Cash is just as important as profit. Do not be too slow to go out to the market and seek funding. If you cannot find anyone else to invest in your idea then maybe it’s not such a good one…
- Failing to systemise- Many owner-managers are consumed by the daily crisis and never find enough time to focus on what’s important in their business. Their business is likely to be freewheeling with no direction or focus, at the mercy of every crisis and drama. It takes practise and discipline to change this behaviour. In order to scale your business you will need to systemise – all core processes needs to be mapped out and documented. Get your team involved, encourage cross-training and knowledge-sharing. Make sure that everyone in your business feels responsible for consistency and continuity.
- Micro-managing– Even when you have, in theory, delegated work to your team, it is too easy to spend your time micro-managing. You have to learn to let go. Help your people, trust them to do their jobs and let them make mistakes. It’s hard, especially when the business is your baby, but it is the only way that your business will be able to grow. If someone is always telling you that everything is fine, I would be wary! In business things are always breaking – that’s usually the only way you learn and grow. Ensure you put metrics in place so that you are dealing with facts and not just what people tell you.
- Not asking for help– Many entrepreneurs are terrified that their ideas and approaches will be stolen from them and so they avoid countless opportunities to get feedback from potential customers and partners. Get your minimum viable product out there as soon as possible - test, refine and repeat. It is so easy to get completely consumed by your business and to feel full of fear and anxiety. Having an experienced mentor or coach can provide the necessary challenge and perspective. Joining a support or accountability group can be a great way to realise that you are not alone. Share stories and learn from each other – the support you receive and give will be invaluable.
Lisa Zevi is the Operations Director of Walpole Partnership and the Founder of COO in a BOX. https://www.cooinabox.co.uk