Many people believe that for them to learn the ropes of running a business they have to make several mistakes. Moreover, there are those who subscribe to the idea that they have to commit the mistakes themselves. It is true that experience can make you remember the lessons more as compared to simply reading them from books. However, although one can learn from such situations, a mistake can be avoided by leveraging on the experience of others who have done it before. Such is the beauty of EO.
Some of them started young, not having enough time to fully prepare themselves for what lies ahead on the entrepreneurial path. Others consider themselves as accidental entrepreneurs, discovering a profitable venture by indulging themselves to their passions. It was inevitable to experience slipups, oversights and missteps in their journey. But one doesn’t have to go through all of those blunders to learn and do the correct thing moving forward. EO Melbourne members share the mistakes they did in the past that become valuable lessons for them and others.
Common mistakes were related to people, finances, decision-making and strategy. Most of these errors were committed during the early stage of the business. It may not be a guarantee that you will not have any lapses along the way, but you can lessen the pain if you only heed to the warnings and lessons of those who have done it in the past.
- Hiring the wrong people – Business owners tend to hire staff based on skills than culture fit. It may cause problems in the long run. No matter how skilled a person is if that member does not have the values and work ethics appropriate to your business, then that can lead to conflicts. Related to this mistake is hiring the wrong people too fast and firing them too slowly.
- Putting too much trust on the wrong people – Partnerships break apart, embezzlement happens, and executions fail because too much trust is placed on the wrong people. Listening to people who have never run a business is listening to opinion than facts. While trust is important in a business, one must always have a safety net in place to lessen the negative impact of a relationship gone sour.
- Not surrounding oneself with a team of experts – Engaging with people who are better than you can help you with your development as a business leader. There are communities, such as EO Melbourne, where you get to learn from experts and apply their lessons to your experience.
- Over committing to clients – During the initial years of the business, there is the trap of saying yes to everything, in the hope of getting as many sales as possible. There is a tendency to over-promise to clients and customers, even when there are not enough resources to deliver them efficiently. It can upset customers, which can cause more harm than good.
- Taking a huge financial risk or being overcome by fear – One of the missteps entrepreneurs make at the early stage of the business is going aggressive with expenditures. The opposite, which is scrimping on necessary things that will allow the operations to go smoothly, can also be dangerous. Sometimes they put too much capital on products that are untested. On the other hand, they tighten their belt that they end up offering low-quality products or services.
- Not knowing the numbers – A business owner can hire an accountant or someone expert on the finances, but it is still an advantage to understand the cash flow and know the financial books. Having no knowledge of such can be a flaw to your business.
Decision-making and Strategy
- Having no expertise – Another faux pas is establishing a venture where the owner has no expertise, or they expand their business to areas where it is poles apart from their core business. At least familiarise yourself on the ins and outs of the industry to have a big picture of the environment you are entering.
- Deciding things late – Several business owners regret not starting sooner. Time is of the essence and holding off important decisions may affect your business. Others do not fully commit to their business 100% until a problem arises. Some suffer an analysis-paralysis syndrome because they overthink concepts instead of executing them.
- Lack of preparation – Certain businesses start without any vision, mission or business plan. Entrepreneurs can save a great deal of time, money and effort if they do market research, trial and testing and pre-marketing initiatives at the early stage of their venture. Similarly, a growth strategy must be in place, which includes honing one’s skills and those of the team members. It also includes not fixing the proper documents, such as agreements, contracts, and licenses.