I absolutely hate it when I see smart people do dumb things!
Unfortunately, this happens all the time in business. For example, you see smart marketers who never leave enough time for a proper launch. Or content providers who continually blow all their money by building out a product without any research or testing only to find out it is NOT a sellable product.
Or my personal favorite, entrepreneurs who think they know it all and can do it alone. And, to me, this one is the saddest.
Why?
Because so often their ideas are great. Plus, they work hard!
But, they just don't know what they don't know. So instead of being widely successful, their business fails.
Unfortunately, I have seen this a countless amount of times over my 25 years of working with and watching hundreds of entrepreneurs.
So I put together a list of:
The Ten Deadly Mistakes That Entrepreneurs Make That Destroy Their Profits, Morale and Reputation!
1. They Do Not Have Clarity of Vision: If you do not understand why your business exists, then how can your customers, your team, vendor and joint venture partners? You need to create a mission statement. Your mission says why you do what you do. Your statement needs to pass the t-shirt test. And, you can never subordinate the mission in order to get money!
2. They Do Not Create Core Values for Their Company and Employees: You see your core values dictate how you do business everyday. Remember, never subordinate your core values in order to get money.
3. They Do Not Understand the Need for an Org Chart: An organizational chart not only adds structure and efficiencies to your business, but it clarifies who an employee should go to solve a problem or present an idea. I know so many entrepreneurs that have an entire office full of employees, yet the organizational chart doesn't reflect what the employees actually do.
4. They Do Not Create Job Descriptions: Entrepreneurs tell me all the time that they need help. Yet, when I ask them what the person would do, they look at me like a deer caught in highlights.
You cannot possibly hire the right person if you do not know what you want them to do.
So, before you can initiate your search, you have to write a job description. If you have never done this before, start by writing down everything you think you want your new employee to do. List their responsibilities. And next to each responsibility, write down the necessary skill. Be specific.
Let's use the example of a receptionist:
Once you know the characteristics of your ideal employee and can define the job and the skills that employee needs... you start looking.
5. Confusing a Passionate Idea for a Sellable Idea: When people ask for advice on what their business should be, I tell them two things:
- Something you have experience in.
- Something you are passionate about.
Once you have narrowed that down -- you must confirm that your idea is sellable. Just because you love it, does not automatically qualify it as a good idea. You idea must be sellable -- meaning, do people want what you are selling?
Just do some simple keyword research. If you have at least 10,000 look-ups a month, then go for it.
6. They Do Not Pay Themselves: Most entrepreneurs do not factor their income into their financials and business plans. They live with the attitude that they will take what is ever left at the end of each month.
7. They Do Not Know Their "Keep The Doors Open Number": Most entrepreneurs have no idea of the "real" cost to run their business. This is a big problem because it leads to never understanding the health of your business. So right now sit down and write out EVERY fixed cost you have, including paying yourself. Once you have done this divide that number by 365. And there you have it -- the amount of money you need to bring in each day to keep your doors open.
8. They Suffer from Shiny Penny Syndrome: If you have a tendency to bounce from one "cool" project to another, you are not alone. However, this will break your business faster than anything else. You see when you have several projects 50 percent done, that yields you zero revenue. However, one project 100 percent done brings money in the door.
9. They Don't Understand the Value of Giving Away "Ownership" of the Company: Now this does not mean for every person. It means for someone (or a couple) that will take the business to the next level. Think about it, you can't get past that two million dollar level. If someone could come in and take you to 5 million the first year, it would make perfectly good logic to give 50 percent away. It's a numbers game, my friend. Just remember 100 percent of nothing is still nothing. Don't let your ego prevent you from having a real business.
10. They Avoid Confrontation: Too many entrepreneurs are way too concerned about being liked and have a hard time being proactive when it comes to uncomfortable situations in their business. If there is a problem, confront it. Better yet, if there is a potential problem, jump on it before it comes a problem. Letting problems fester tends to lead to:
- Bad deals
- Bad employees
- Bad company morale
Remember, it is business and there are always ways to handle even the most uncomfortable situation with tact and respect.
If you see yourself in even one of these items, now is the time to bring in someone to help you work through it. When you stop making these basic mistakes you will see a spike in your bottom-line, your company morale and people will want to work with you.