Last week we covered six of the 12 biggest mistakes most small businesses make. Here, in my humble opinion, are the other six.
#7: Working “in” the business rather than “on” the business. Many self-employed people think they are entrepreneurs when they really aren’t. They are working full time in the business, without any partners, employees or assistants. They take care of everything themselves, from dealing with customers to keeping the books to running to the office supply store every time the printer needs a new ink cartridge.
Successful small businesses grow over time, and you can’t grow a business with only one person involved. As a business owner, you should devote most of your time to setting goals for your business and detailed plans for achieving them, with the occasional interruption to deal with an existential threat. If you are spending 14 or more hours a day doing other things, you will be too tired at the end of the day to even think about long-term planning and strategic thinking.
Read “The e-Myth Revisited,” by Michael Gerber, for practical advice on delegation, team building and managing your time. And remember, “when you are up to your butt in alligators, it’s difficult to focus on your goal of draining the swamp.” Let your staff deal with the reptiles – er, I mean customers – to give you more time to dream.
#8: Ignoring your legal, tax and regulatory environment. Government has its hands in every business in America. No one is exempt. Stop paying your taxes (or play games on your tax returns), and you will lose your business on the first audit. Hire an “independent contractor” and work him 50 or more hours a week and the IRS will come after you for unpaid payroll taxes and penalties. Say things about your competitors that aren’t true, and you could be sued for libel or “interference with contract”.
Every small business needs a good lawyer AND a good accountant. Hire good ones, and stay in touch with them frequently. Legal and tax problems are always, always avoidable.
#9: Creating a workplace culture that alienates employees. People used to say that successful businesses “first took care of their customers, then took care of their employees, then took care of their shareholders.” Somehow over the last 30 years the “employee” piece has disappeared, and America’s big companies have suffered as a result.
Your employees are the “front line” of your business’ image and reputation. When employees aren’t motivated, it shows. The quality of your customer service suffers. If you came to the entrepreneurial world after working in a toxic office environment, shame on you for making the same mistakes your former employers did.
These days employees, especially Millennials, want a purpose in their work. They don’t just want a paycheck. They want the opportunity to have a positive impact on the world, to make a difference somehow. Treat them like “costs” and they will move on. Or worse, join unions.
Treat them like “assets” and they will reward you with loyalty and conscientious service. Help them grow and develop. And make sure the good ones are well compensated.
#10: Lacking a succession plan. Note to you Baby Boom geezers out there: you will not live forever. No matter how much yoga you do. No matter how much organic kale you eat. Sooner or later you will die. Even sooner you will slowly, imperceptibly lose the ability to manage your business from day to day.
Who do you want to take over the business when you no longer can? A family member who is currently doing something else? A loyal employee who couldn’t afford to buy the business if you dropped tomorrow? A neighboring franchisee who has always wanted to expand into your territory?
Make a list of potential successors and start putting things in place that will make it easier for your chosen successor to transition into the business seamlessly. As the Bible says, no one knows when their hour will come.
#11: Worrying too much about what other people think. Your reputation is important, but getting the important things done is more important. Reaching your goals is more important than being nice to everyone you encounter along the way, especially people who are blocking your path. See my YouTube video “Three Personality Traits Every Successful Entrepreneur Must Develop” to learn how to be ruthless and still like yourself in the morning.
#12: Not understanding what “success” really means. Everybody has their own definition of “success in business.” Here are mine, in order of importance. A successful business:
- makes money;
- survives difficult times;
- has repeat customers;
- grows over time;
- is competitive;
- has an impact;
- stands out from the crowd;
- is highly regarded (or at least grudgingly respected);
- attracts good people as employees, partners and investors; and
- is one you are proud to own.
Cliff Ennico (firstname.lastname@example.org) is a syndicated columnist, author and host of the PBS television series ‘Money Hunt’. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com. COPYRIGHT 2016 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS