There is an old but true adage “that a person who never made mistakes, never made anything.” Every entrepreneur can reinforce this saying with painful examples from their own experience. However the ones you won’t hear from are those who didn’t survive their mistakes. It is a sobering fact, according to a survey by NatWest Bank that two thirds of business start ups in the U.K. are no longer trading after two years.
This is a sobering thought and a counterpoint to all the “inspirational” lifestyle programmes and articles showing how people have successfully transformed their lives by being happy entrepreneurs. As for mistakes, you'll make them, try to fix them, and then move on. However, some entrepreneurs fall into traps that are bigger than mistakes. They are, in effect, entrepreneurial sins. Some of these sins will harm their personal life; others may irreparably damage their business, and still others will do both. It is said a wise man (or woman) learns from others mistake, a fool learns from their own. Well in the real world we mostly hover on an edge between wisdom and foolishness so as an aid to karma here are ten entrepreneurial sins that you should avoid:
1. Not learning from your own mistakes. Talk to any entrepreneur and he or she will tell you about crazy, ridiculous mistakes that will have you shaking your head and saying, "I just can't believe someone could be that stupid." Well, they can, I can, and so can you. I don't think it's stupidity at all, by the way. Entrepreneurs have so many irons in the fire that it's all too easy to get distracted, to let things fall through the cracks, to overlook what might seem obvious to an outsider.
Entrepreneurs by their very nature are obsessive and myopic, not necessarily props to aid good judgement. No matter how sharply honed a business sense they have; they don't have a crystal ball. No one ever learned anything meaningful from success, but failure–well, failure is an eloquent teacher on business and life. Accept that you will make mistakes–just make sure that you learn from them, and work hard to never commit the same mistake twice.
2. Trashing your personal life. Balancing "work" and "home" can be a challenge for anyone, but for entrepreneurs, it seems to be especially daunting. It's not hard to understand why. Entrepreneurs tend to work longer hours than your average wage slave. Because they are so passionate about what they do, they are always thinking about the business, today’s crisis, tomorrow’s challenge, the next venture waiting in the wings. The entrepreneurial mind is hard to turn off. It's hard to take a vacation. It's hard to put aside your worries about paying the wages so you can help your son with his homework, or connect emotionally with your spouse, or spend meaningful time with your friends, even if you are still in touch with them!
Too often, the result is a strained parent/child connection, or a bitter divorce, or a roster of business relationships and casual acquaintances in place of real friendships. Work can and should be a richly fulfilling thing, but it is no substitute for meaningful relationships with people you love. No one wants to neglect the people that matter, but unless you are constantly vigilant, it does happen. You have to find a work / life balance.
3. When Benjamin Franklin said that the world will come to the door of the person who builds a better mouse trap he knew as little about marketing as he did about mice! Your new business is up and running, your OPEN sign is in the window, and you are ready to serve your new customers. Only no one is lining up at the door and the phone isn't ringing. Why? - Because you didn't do any marketing to get the word out about your business. There are lots of ways to get the word out. It doesn't really matter how you do it, just that you do it. A bit of well-planned-out marketing will help you turn that empty store or slick web site into a bustling business.
4. Losing your soul. Financial success can do awful things to people when they aren't spiritually and emotionally equipped to handle it. Too much money too fast can make you suspicious, callous, greedy, and prideful. Think of the Seven Deadly Sins and you'll get the picture. Success can change people and lead to the same signs of compulsive dependent behaviour you see from other toxins. When you become successful, people will start to treat you like you know something. If you start believing your own publicity, you are in big trouble. Remember no amount of money makes up for losing sight of the things that really matter in life–friends, family, humility, compassion, faith, and love. Strive always to be the kind of person who, if you lost every cent you had, could still find happiness. I’m no one to plug religion but I do remember a clergyman telling me that he has never heard anybody on a deathbed say “I wish I spent more time at the office.”
5. Maxing out on credit cards. It's never a good idea in any situation. Maxing out your credit cards while trying to get a business off the ground could be disastrous. You'll find that charging item after item for your new business will be the most expensive money you've ever spent. I think credit cards are the most accessible and easy way for small businesses to get in trouble. (After all, they are much easier to get than start up loans!) There will be times when you will want to use a credit card rather than take cash out of the business, and that's okay. Credit isn't inherently bad. Just make sure you have enough money to keep making payments on your cards.
It is vital that you have good credit in case you need to make a big purchase or decide to open a new business down the road. You don't want to run up tons of credit card debt that you will have to pay off if the company doesn't survive. Remember in any area of business the zeros can come back to bite you!
6. Keeping your idea a secret. At first glance, this may not seem like a sin. In fact, it may seem like a good business decision. Many entrepreneurs don't want to reveal their new idea for fear that someone else in the market will beat you to the punch. But step out of your own shoes for a moment and look at the distrust this will induce in potential investors. In the early phases there is no need to reveal all the details of your product or service, but you must put some feelers out there to determine whether it's likely to succeed or flop. Revealing some of your secrets and finding out who your potential customers will be provides peace of mind.
7. Imagining you don't need written contracts. There is so much excitement at the start of a new business that rookie entrepreneurs are often afraid to get certain things down on paper. Learn from other’s mistakes: When you are starting a new business, you need contracts for everything! Verbal agreements just won't cut it, especially when it comes to partnerships. You can't predict the future, and when money is involved you never know what will happen within a relationship. To ensure that you avoid unnecessary costly (and gut-wrenching) legal battles, always write out a contract when making business deals. You never really know the calibre of your partners until money is involved and backs are to the wall.
8. Starting a business without the passion factor. Here are a few questions to ask your-self before embarking on an entrepreneurial venture. Am I truly interested in this field? Do I daydream about doing the work (instead of just spending the money)? Does this product, service, or activity feel meaningful? Does it benefit humanity? Being an entrepreneur is hard work, so you'd better want to jump out of bed bright-eyed and bushy-tailed every morning, anxious to get to it. Too many people start businesses based on their hobby on a half baked idea for which there is no realistic market. Chances are you will get the company going, and after your initial excitement wears off you will stop caring about the company, which will cause you to make mistakes. Carefully consider every angle of the venture before you get going and remember if you can’t hug it chances are you shouldn’t be doing it!
9. Choosing a wrong location. We've all heard the mantra "location, location, location" – originally attributed to one Colonel Saunders! If you are starting a company—especially a consumer oriented one—location may be vital to its success. Carefully consider how important foot traffic will be to your business. If you will be relying on passing trade to bring business to the store, you will want to make sure it is very visible. Choosing a bad location could make it difficult to create a successful business. I know this from personal experience when I fell in love with premises because they were ideal internally and good value without fully considering the convenience and perception of customers.
10. Trying to go it alone. There is a lot to be said against traditional business partnerships, I think it is absolutely necessary that you have a business "Mentor" when starting a business. When you start your new business, think about your strengths and weaknesses. And then find someone willing to help you who complements those strengths and weaknesses. You may choose to make that person your business partner or you may just hire him on as your employee. There are simply too many details to deal with to fly solo. Relying only on yourself is simply too much pressure. Nurturing great relationships is a much better way to do business than to try to go it alone.
Of course, committing one or two of these mistakes may not kill your business, but it will certainly make things more difficult. Remember this list as you start to develop your business and pay careful attention to each mistake. You, your family, friends, and business partners will be much happier if you avoid committing these mistakes. It will mean the difference between being a happy entrepreneur (surely an oxymoron?) or being one who is wracked with worry and unnecessary pressures caused by bad decisions. In business, living to fight another day is never a bad result!
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