7 deadly small business sins
Starting up in business, or upon a new business project, is a challenging experience which will test every owner-manager’s enterprise aptitude and ability. And one factor which is certain to cause anxiety and stress is the reality of business mistakes ranging from regular awkward stumbles to falling into lethal potholes with no way out.
Making business mistakes can be a painful experience, but it does not necessarily exclude the possibility for recovery. However, some mistakes will unfortunately be terminal. On the other hand the process of overcoming business blunders can also be an enjoyable experience and one of the most beneficial ways of learning the art and craft of entrepreneurship.
The following seven mistakes are some of the most common business sins committed by owner-managers in new small firms.
1) Valuing style over substance
This is one of the most serious and prevalent small business sins and has been typified recently by the enterprise-for-all business support initiatives promoted through the Business In You and Start Up Britain campaigns. Eccentric PR, look-at-me broadcasts from self-styled experts, publicity-seeking headlines, celebrity videos and pretty-looking logos on a website are not representative of the substance that is needed to make a business successful. Business success is based on what you can deliver, and what measurable or quantifiable value you can provide to a target group of customers and at a profit. A glossy looking brochure or flashy online ad will not generate sales unless you have a product which is packaged and priced to meet genuine demand. Style and soufflé is vanity, substance and surplus is sanity.
2) Focusing on the destination and not the journey
We’ve made the point many times previously about the value of not just producing but using and acting upon a business plan. However, the majority of business owners get hung up on the destination identified in their plan – the ultimate objective which they are aiming at over the medium to long term – but fail to address the path they need to take to reach that destination. Many business plan authors fail to start up their project at all because they neglect to work out how and where to commence their business journey. Too many also fall into the style-over-substance trap which focuses on what they want their business to look like rather than what they need it to do, and the steps they need to take along the road to their destination.
3) Taking too long
Procrastination and distraction are dual sins which are common to many inexperienced and inept business owner-managers. The result of their over-deliberations and ill-disciplined attempts at execution of their marketing, product development and financial plans is that the opportunities they ought to have been focusing on pass them by and are exploited by their rivals, many of whom they did not realise they had. A flimsy, day-dreaming attitude is a sure-fire way to ensure that those genuine business ideas or profitable business opportunities never actually see the light of day.
4) Being too quick
On the other hand there are an equal number of trigger-happy, impulsive owner-managers who will jump head first into every business idea or opportunity they encounter without any consideration for the capital, human and opportunity costs of what they are doing already, and the implications of yet another change of course. The planning of any business activity or pursuit of an opportunity requires at least a token attempt at research and preparation before commencing down a new road, and adequate consideration for how the business should prioritise and allocate what are usually very scarce resources at its disposal. This point is the very essence of entrepreneurship. It is not a coincidence that all new business projects take longer to complete than the time that business owners initially think they will take. They invariably need more time.
5) Giving in
A problem and another fatal sin for many business owners is not having the guts to see things through to a conclusion, or quitting when they might actually be within touching distance of a result without realising it. Gut feel for a business situation is as important an attribute as a strong enough gut for the challenges and barriers that lie along the rocky, twisting road to your business destination. The challenge is often not about the immediate hurdle or roadblock you are facing but more about deciding whether there are more difficult or insurmountable hurdles lying ahead, or whether success is actually just around the next corner. For many business people they end up regretting that they will never know what lay around that next corner.
6) Not giving in
It’s a little acknowledged fact that the most entrepreneurial business owners are the ones who quit at the right time and know when to do it. Those business owners who refuse to, or are clueless about when to quit or radically change course are the ones who end up with the most costly and damaging business failures. Costly not only to themselves, but also to their suppliers, funders, family and friends. Refusing to give in may seem like a contradiction of our previous point. But in fact it is the same point. Truly entrepreneurial owner-managers have a natural knack and ability to know how and when to quit and minimise losses and damage, or when to jump those last few hurdles and experience the sweet taste of business success.
7) Not realising you are the problem
Problems and mistakes in business can be put down to all sorts of root causes and reasons. A shrinking market, withdrawal of financial backing, underperforming staff, unreliable suppliers, business partners going under are all typical examples. But generally speaking there is a common denominator which is evident in every business problem or failure and which can be pinpointed as one particular cause. And that problem is the business owner himself or herself, and usually where they are either reluctant to admit it, or they are oblivious to it being the case. If you are the problem in your business – and it certainly will be you some of the time – then learn how and when to get out of the way and get someone else to help when you need it. Avoid doing this at your peril.
For most people the experience of running their own business is the only one they will ever get. Unfortunately the current crop of senseless enterprise-for-all support initiatives favoured by policy-makers will probably only increase the likelihood of that experience being short lived for a great many people who are being tempted into business or self-employment through hardship or redundancy.
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