The Ten Biggest Entrepreneurial Mistakes
CNBC reached out to me a few months back and asked me what the top ten biggest entrepreneurial mistakes. The article has been on their site for more than a month now, but just in case you haven’t checked it out, here are the take aways:
10. Rich McGreedy – Trying to Get Rich Quickly
Overnight success usually takes 15 to 20 years to achieve. If you go in expecting to be rich overnight, you may become discouraged early on and give up your dream prematurely. Know that success takes time, perseverance and a little bit of luck. Give your business the time to grow. Only if your company is stagnant for a long time should you take it as an indication to try something new.
9. Mr. Confident – Assuming No Competition
Even if you have the latest, greatest, never-been-done-before approach to something, don’t assume that you have no competition. Competition is more than just the direct, obvious competitors. Competition is also all the available alternatives. What else could the consumer do instead of using your product or service? Could they do nothing?!? The customer almost always has the option of walking away and that is a serious competitive threat.
8. The Pushover – Being a Weak Leader
The success of your company is contingent on you being a strong, effective leader. This does not mean you need to be an authoritarian, and this does not mean you are everyone's buddy, either. A great leader sets the course for the company, communicates it constantly and inspires the team to get there.
7. The Workaholic – Being All Business, All The Time
Many entrepreneurs put their personal lives on hold to focus exclusively on their business. Ultimately, both suffer. No question your business needs your full attention and effort, but only in short spurts. Just like a peak athlete, in addition to cranking up for game time, you need to have a proper, healthy diet, get enough rest and take breaks. Balance your personal and business life and you will actually do better in both.
6. The Dreamer – “Pie-in-the-Sky” Financial Goals
If all business plans came true, being a billionaire would be nothing extraordinary. Many entrepreneurs go into a new venture planning astronomical returns. Yet, most never even get the business off the ground. Unrealistic goals not only hurt your credibility, but can also be an emotional drain. Set specific, measurable, accountability, realistic, and time specific (SMART) goals to ensure continual progress; chances of being an overnight success (albeit in 15 to 20 years) are much greater!
5. Dazed & Confused – No Rally Point
There is a reason why employees leave high-paying corporate jobs to go to start ups, and it sure ain't for the money. People are driven to serve an important purpose, in addition to bringing home enough bacon to feed the family. Many businesses never define their real purpose for existence and continually attract a mix of employees who are seeking success in different ways. Clarify the purpose of your company, beyond just making money, and you set the stage for attracting like minded employees. A team focused on the same goal is a very powerful force.
4. The Slasher – Cutting Prices
Often, the first thing entrepreneurs resort to when business is tough is to try differentiating on price. Cheaper prices mean more customers, right? Wrong! Most customers are willing to buy more expensive items because of the greater quality or the better convenience. During tough times, often an increase in price, coupled with improvements in quality or convenience can bring the customers in droves. Price slashing is a dangerous game. At some point you have to slash yourself to keep costs down.
3. Say What? - No Clear Marketing Strategy
You never know where, when or how a new prospect is going to hear of your business. If you have a mix of messages out there, the prospects will have an unclear expectation of what you offer. Your company must be presenting a consistent clear message on all fronts. You will never get a second chance to make a first impression. Make sure every opportunity a new prospect gets to see your business for the first time receives the same, consistent message.
2. The Liar – Not Being Forthright
The days of cover ups died our with Bill Clinton’s denial of sexual relations with Monica. The anonymous nature and grand size of the Internet allows someone in the know to share anything with anyone at anytime. If your business tries to cover up a mistake, it is just a matter of time before the word leaks and you are labeled as a liar. That's not good for business. Be the one to break your own bad news, you just may be perceived as honest and trustworthy.
1. Mr. Can-Do – Trying to Do it All
The greatest mistake entrepreneurs make is to believe they can do it all by themselves. While an entrepreneur can do most things, they do most things poorly. Just like any other person, an entrepreneur has one or two God given talents. As an entrepreneur it is your job to identify what you are great at and do those few things to your fullest. Surround yourself with people who are strong where you are not. Great companies are built on the foundation of exploiting a few strengths, not on trying to be masters of everything.
If you liked all those tips and are starved to check them out with the pretty pictures, be sure to visit CNBC’s slide show. Don’t forget to check out the most important slide of all, my pretty media (whore) picture.
Quite frankly there are way more than ten common mistakes. What are the mistakes you have experienced, or your “friend” has gone through?
Posted by Mike Michalowicz
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