You want to run a successful business? Start by not shooting yourself in the foot and you need to avoid these mistakes all together.
Many businesses failed all over the time, even the big one least to say. However there are specific failures that business owner and founders are vulnerable too and would never acknowledge. These failures are important to be acknowledged and avoid. A successful leader requires a level of self-consciousness all the time.
Let us examine the nine common mistakes that aren’t easy to discuss among business owner and founder but it’s important to acknowledge them and have it at the back of our mind always:
1. Ego the biggest obstacle in making you to admit your failure
Identifying business failure early is akin to admitting you date the wrong person and you have to get out of the relationship early before it’s too late. In stock market we always use the word cut-loss. There is nothing wrong to admit that you make the wrong decision and get out from it. If you don’t, you could miss the opportunity for a perfect business venture.
2. Putting the right people in the job
Business owner and founder always think they can do everything by themselves because they want to cut cost. But most of the time they failed miserably. Certain people has certain skills that you may not have and they complement, and fill the gaps where you couldn’t perform. As your company grow you need to fill in the hole with talents so that your company has the competitive advantage.
3. You ignore key players feeling
After KY2 undoubtedly we are in an employee world. The top down approach such as in the 70s and 80s doesn’t work anymore. For employee there is a lot of opportunity out there with bigger companies especially MNC. Why should they work for a start-up or small business? Hence it is important you take care of the people who bring value to your company. That is still the right thing to do. In my journey I had seen leaders and business owner who took the glory and credit for themselves discarding their key players. When you demotivate your key players, you are digging your own company graveyard. Understand your people, understand what motivate them, and take care of them. Acknowledge situation that get out of control and comprise, and resolve it for the long term.
4. You don’t grow your brand
Things don’t last forever. I had seen many companies that are successful in the short run but end up suffering in the long run. Primarily because they just focused on quick wins and never thought how they want to grow in the long term. When you don’t invest in your brand you will not be able to create new innovative products or services to address the slumping sales. The lack of brand influence would dent your company growth.
5. You sacrifice long-term relationships for short-term gain
Loyalty is key. Companies often fire people or lay off or refrain from hiring to save short-term profits. When you do that you lose on credibility and the chance to create loyalty with your people.
6. Slave of money over mental health
Every company wants to grow but many of times it is replace with our own mental health. I had seen business gurus constantly telling ‘C’ level to maximise and optimize their employee so that they hit their KPIs. When you outwork everyone, you will exhaust their mental health. Without balance and self-awareness of everyone mental health, the attitude of yours will bring destruction to your company.
Mistake #2: Inadequate capitalization
Also known as “money,” capital is what partners, shareholders or business members contribute in exchange for ownership in the business. Some businesses are capital intensive — as in a dental practice — while others are capital efficient — as in a copy editing company — but in every business, lack of money is the number one cause of failure.
7. Understanding the industry, but not the market
Many business owner and founder that I came to know, knows their industry very well and have the expertise to build their product or services. But what they always miss out is understanding whether the market will accept such product or services? Will people pay for Netflix or Iflix?
8. Not enough capital
I had personally seem over optimistic business owner and founder who claims they can raise millions of funding which will enable them to fly. It’s akin to singing the song, “I believe I can fly and I believe I can touch the sky”,…hahaha… Insufficient capital or money acquisition planning is the number one cause for business to fail.
9. Counting your eggs before they hatch
Like not enough capital or money to run the business continuously, business owner and founder will dream how big their company can grow. This fallacy causes them to count their eggs before it even hatch. Then somehow they realise they need scale back or completely shut down their business before they just don’t have enough resources to keep going. What happen next is they are saddle with debts and their savings are completely gone along with the capital invested by their families and friends.