Mistakes aren’t necessarily a sign that the people who commit them are bad at the job they do; even the best brains and hands fall short. You would be wrong to think that Warren Buffett never made a poor investment decision, or that everything Tony Elumelu touches turns to gold. Humans aren’t perfect; sometimes we fail. A few times, we manage to conjure up absolutely catastrophic blunders, slip-ups of the sort that sinks infant enterprises and billion dollar business empires.
But we can prevent a lot of the common business errors from happening in our own ventures. This is because they are actually well known (but little considered). Ten of the most prominent mistakes made by businesses are listed here. You’ll do well to guard against them.
- No clear purpose
Being in business ‘to make money’ won’t cut it. You should have a mission and a vision that are alive in your thoughts and inform your decisions and actions.
There should be a ‘why’ question which your business is an answer to. You have to be convinced of and inspired by your business idea. Your team should ‘buy’ your concept just as much as you want the world to buy your product. Make up your mind to work only with people who share your sense of purpose and are excited about bringing the vision to life.
- A lack of experience among personnel
Some businesses find that they have to pay large sums to get the best talent and experienced hands to work for them. They don’t want to spend the money involved, so they go for barely qualified people instead. This isn’t wise. The poorly skilled worker will very likely have a production inefficiency problem so severe that his (or her) presence in the team becomes loss generating- the opposite outcome from what the employer intended. Go for talent. If you can’t afford the experience required, look for people who are eager to learn and have trained themselves in some way to be capable of handling the job.
- Poor leadership style
Entrepreneurs may find it difficult to strike the balance between being firm on one hand and fair on the other. They could gravitate to one end of the leadership style spectrum: the authoritarian end, where the entrepreneur governs his affairs like a communist dictator, gives orders with threats attached, takes no suggestions, offers no rewards and dispenses draconian punishments with ease. The leader could end up close to the other end of things, excessively liberal and self-deprecating, allowing himself (or herself) to get tossed about by employees.
We’ve already shown you a way out of this: be firm and fair. Be the boss, but treat your employees like humans. Give them a say, and have the final word. Let them work with creative freedom, but not at the expense of your business’s well-being.
- Resistance to change
Isn’t it easy to just stay in your comfort zone, that familiar space where you’ve always gotten enough to continue as a going concern?
Humans are wired to stick to the known. But the world is changing fast (more so now than ever before), and the way businesses operate is evolving along with it. Stasis is a recipe for death. Keep in touch with the market’s perpetual metamorphosis and customer’s changing tastes, and adjust accordingly. This is the only way to stay relevant, and ultimately, to survive.
- Pursuing unrealistic financial goals
Don’t get hooked on the desire to ‘make it’ quickly. If you do, you will set unrealistic financial goals and waste a lot of time, energy and money on an impossible-to-realize dream. It takes time to build a successful business. Sadly, many entrepreneurs realize this too late. Others never find this out for themselves, because they get frustrated by their inability to hit their other-worldly marks and quit quite early on.
- Expanding too quickly
You might think that business is going very well and that it’s time to hit the expand button. Maybe you should back off a little and take a good look at what you have first.
Don’t open ten new branches of your business just because your profits have been growing steadily for a while. Examine all the factors you possibly can: the overall state of your finances, future projections for your business, the nature of demand for your product or service (seasonal or perennial), the likely impact that new product offerings or new outlets or offices will have on your ability to manage the business, etc. to see whether your business can accommodate an expansion without falling into trouble.
- Ignoring competition
A common mistake made by entrepreneurs, especially by those who think they have a niche all to themselves, is that they pay too little attention to likely competitors. Then they are disappointed to find that the market doesn’t pay as much attention to them (or their product) as they think they deserve.
Actually, you don’t get things in business because you ‘deserve’ them. You get them because you work hard to earn them. So get on your feet, examine your competition, strategize, and better their offering. That’s how to get into contention for recognition and patronage in business.
- Poorly defined marketing strategy
The problem on this front usually has to do with businesses not putting out a clear and consistent brand message across their various communication channels. You can’t expect people to remember your product when there’s no unique feature or idea that you’re consistently associating it with.
This is the age of storytelling in marketing. You have to create a brand story and identity that people can relate to, if you are going to capture their attention in what is an increasingly noisy world.
- Treating internal disputes with kit gloves
Office policy gone nasty shouldn’t be considered ‘normal’ or ‘one of those things. They have destroyed businesses. If you get wind of such a thing developing in your business, deal with it immediately. Get to the root of it, and take the necessary actions to ensure that it doesn’t happen again.
- Trying to do too much at once
Control freaks don’t necessarily make good CEOs. By all means, oversee your business’s operations. But trust the people you’ve hired to do a good job in your absence. Trying to micro-manage your team might wear you out and cause internal organizational friction.