By avoiding the mistakes that so many business owners make you have a far greater chance of succeeding beyond the first 2 years.Hilary Briggs is a management consultant with over 15 years of industrial experience having held senior management positions at Rover Group, Whirlpool Corporation and The Laird Group plc. For the last 10 years, she’s worked with SME’s to improve their performance. Hilary is also chairman of the Central London group of the Academy for Chief Executives.
In her experience working with business owners from a variety of sectors she’s identified seven key mistakes that business owners make again and again and that often lead to the death of their company;
1. Doing Too Much Yourself
Many business owners fall into this trap as they attempt to keep costs down. But it can mean you get bogged down in day-to-day issues and fire-fighting. There’s less time to step back, plan for the future and anticipate problems.
If the cracks are beginning to show it may already be too late, so get additional help early on.
2. You Don’t Know What You Don’t Know
Many businesses are founded because the owner is good at something and enjoys it. What they forget that is that a business also needs many other skills from sales to book-keeping.
Learn to recognise where your skills and knowledge fall short and take action to remedy this gap.
3. Growing Too Quickly Before Your Model Is Proven
As sales increase the business owner expands staff and premises – only to have to cut back as the sales increase turned out to be a blip. Also, if your working capital is tied up in stock or covering debtors then the company runs the risk of running out of cash.
Plan for expansion and meet your Bank Manager to discuss funding in advance. In addition put appropriate systems in place, so you don’t end up being sucked into more and more areas as the business grows.
4. No One To Bounce Ideas Off
Many new businesses are too small for a Board or Non Executive Director. Some issues are not appropriate to talk to staff about, often partners and friends just don’t “get it”, and advisors may have a narrow focus or worse still have their own agenda. So business owners end up in a silo on their own.
This can be very damaging. Talking things though with others is important as it may yield new perspectives. Develop a small network of people you can trust and be sure to talk things through and get their views.
5. Bringing In The Wrong People
Many business owners hire in their own image – so gaps are not actually filled. Often recruitment is left until the last minute (to save costs) and so a rush decision is made. It’s easy to rely on friends and family but in the longer term they can be a constraint, and a tricky problem to deal with.
Remember, no matter how good someone is, if there’s a difference in values, then all that matters is “When will the row happen?” and “On what subject will it be?”
If you’re considering using a consultant/mentor find out; how much real world, relevant experience do they have? Are their skills complimentary to yours? Do you have mutual respect? How important will you be to them? Do they know their own limits? What networks and contacts do they bring? Will they let you talk to their clients to get a feel of how they work? Make sure you are comfortable with them before committing yourself.
6. Lack of self awareness
Many business owners refuse to face their insecurities, often because they don’t want to appear stupid. They want to hold on to everything themselves because they believe no one can do it as well as they can. They have a lack of awareness of their strengths and weaknesses, and their impact on others. Ultimately this means they are less able to build a strong team.
This then reinforces their view that “you can’t trust others to do anything…” So be honest about yourself – if necessary ask a trusted friend for feedback.
7. Staying in the comfort zone
It’s easy to stick with people you understand – but who is testing your thinking?
Whilst it may be uncomfortable, it’s better than experiencing the discomfort of a major problem because no one had the courage to challenge you.
Mixing with others increases your chances of developing new ideas and solutions. The more diverse your contacts, the more you’ll also be able to “narrow the angles” on potential problems. It’s better to learn from others’ mistakes than get extra battle scars yourself!
By avoiding, at least to some degree, these seven common mistakes your business has a far greater chance of not just surviving but thriving! Take a look at each area, ask yourself some tough questions, and be honest! Your answers and the actions you take could make all the difference to your future wealth and happiness.
About the Author: Hilary Briggs, chairman of the Central London group for the Academy for Chief Executives, is passionate about helping businesses grow.