For people with the entrepreneurial spirit, the dream of starting a business, launching products, and becoming a successful business leader is excitement that fuels desire, even through the challenges. Unfortunately, when it comes to many things in your fledgling business, it will take a lot more than entrepreneurial spirit to get past the starting line. Making mistakes in business is part of the learning process and is inevitable. Here are some of the most common failures that entrepreneurs make, in hopes that you can learn from these mistakes and not repeat them.
Take Your Time When Hiring Staff
One of the biggest challenges, and yet most important decisions that any new company must make, is the quantity and quality of the staff they employ. Every employee choice is a critical decision. You need to find the best combination of skills, personality, and motivation to drive the company forward. Do not rush your first appointments, but rather evaluate each potential candidate thoroughly. Here are a few tips to consider when trying to hire the best candidates.
Consider How And Why You Promote Staff
Another common failure amongst entrepreneurs is promoting the members that excel to higher positions within the company. Although this sounds like normal and good business practice, it is important to consider the skills which made that employee so valuable in the first place. Although it is important to reward past performance, as a great leader, it is equally if not more important to assess their suitability for the new role. Perhaps the new role involves managing staff, something that has never been tested of that particular candidate. Perhaps it is an entirely new role with a new set of skills. Get this decision wrong, and as a leader, you might create two problems. The first issue is that you are weakening that department by removing perhaps the best employee you currently have. And secondly, you are putting that star employee into a role for which may be poorly suited. It might be more beneficial in this situation to promote the employee within the same department and employ another staff member staff that is better qualified and suited to the new role.
Be Prepared To Remove Non-Performers
As the CEO and leader of any company, one of the most difficult actions will be accepting that you made a mistake and hired someone that is simply not performing to the required standard. The easy option is to do nothing, but the reality is that other members of the team will quickly realize that poor performance will be tolerated within the company and it will spread rapidly. It is important to provide people with the chance to improve, to supply the required training if possible, and then to monitor the situation for signs of improvement. If that doesn’t happen, then make the tough decision to part with that employee.
Not Creating A Repeatable System
Look at any large company, such as McDonalds, that is world renowned. Do they have different systems and processes in place around the world? Do they let each store run their own promotions and create individual burger combinations? Absolutely not, the secret to their success is to come up with winning formulas and then duplicate them. Ensure that everyone understands the system, and can repeat and teach it to new employees when called upon. Create a repeatable system that is proven to work and backed by data, that way there is no confusion or question about success. Without a system in place, employees cannot reach their potential for productivity.
Losing Control Of Costs and Expenditures
The process of making money is very exciting, particularly for the owner of a company. The problem in the drive to achieve income is that it can be very easy to lose track of expenditures. A solid business is built on ensuring that costs are minimized and profits are maximized. When starting a company, it can be very tempting to purchase new computers or other equipment that you probably don’t need.
You do not have a long term business if expenditures are greater than income. Evaluate every purchasing decision, perhaps consider every purchase overnight, as many will be impulse decisions, which you will regret in the morning. Consider purchasing second hand, at least initially to keep expenditure down. Don’t be tempted by a new car or other needless expense, just to look good; build up the business properly and you will be able to afford to buy the car of your dreams, without going into debt. Although this may sound boring the simple fact of the matter is that you don’t get rich by purchasing expensive products that are not essential for the business.
At Nocel Coworking, we are constantly searching for not only ways to improve our own business, but also in ways to assist others. Our blog is designed to assist entrepreneurs and small business owners developing their business. Visit the blog regularly to read the latest posts, ideas and concepts which hopefully you can implement into your business.