“Don’t worry, we all learn from our mistakes,” I found myself saying to an entrepreneur last week. He nodded and promised to put it behind him and push onwards and upwards. I nodded, satisfied I had bucked up his spirits, if silently berating myself for talking in business clichés.But when I thought about this after the meeting I realised that time and time again I have seen the same mistakes made by businesses and entrepreneurs. So, here are my top list of blunders any business should beware of.
1. Hire too fastHire in haste, repent at your leisure. Most of the time in business it is not the idea that counts, but the execution of the idea. And you can’t execute really well without a really good team. There is no secret recipe. Find strong skills and leadership in each particular specialism you need, stir in passion, drive and commitment, add a dash of the right connections and experience and success could be on the menu. But I have seen many businesses hire the first person they find, or take someone on based on their ‘gut feel’ from a first interview. The result is all too often a bitter pill to swallow rather than a great recipe.
Hard lessons learned:Always take your time for key hires. Hold several interviews in different environments and with different people over a sensible period of time. Never ignore references and do your homework. Always look for people better than you or your colleagues in their own field. Ask yourself if a candidate looks too good to be true – are they? If you and your colleagues are not 100 per cent sure, and one or more of you have niggling doubts, don’t hire! And if you can, try before you buy – get the candidate in for a trial to prove their worth.
2. Only focus on the product rather than the businessIt’s about the cash, stupid! Many businesses obsess about their product to the point that they won’t go out and sell it until it is perfect. The problem is, in their eyes, it is never perfect (in fact no product ever is). Remember that all the time spent tinkering, means the tills are not ringing. Worse still, the longer a product takes to launch, the more likely it is that slicker and faster competitors will steal the prize. Then there are the companies who are too well versed in the mantra ‘we will build it, they will come’. In my experience this never works. A business without a well-thought through marketing and distribution plan will usually flop rather than fly.
Hard lessons learned:Find out what customers actually want and will pay for – then go and sell it to them. Any product can be improved over time. Test, talk, try – don’t tinker. Always identify your perfect client and exactly how you are going to reach them. Don’t overbuild your product – build profitable sales and customers. Customers normally buy because your product helps give them pleasure or take the pain away. Or helps them make them money or save them money. Really focus on how your product helps customers.
3. Go with your gut feelDon’t get me wrong, business instinct has got a good part to play in business, especially as instinct is honed by experience and expertise. But business leaders can’t just action pure gut feel – without risking some stomach-churning risks and results.
Sticking rigidly to pre-conceived ideas or becoming a stick in the mud, unwilling to change your opinion in the face of the facts, are other all-too-common blunders.
Hard lessons learned:Always track and measure what you are doing and be willing to change your mind if your gut feel is wrong. Before you spend time and money in a business area or on a product, always spend time testing it. Consult experts and market specialists to give you an independent view and sanity check. Keep tracking and measuring as much of what you do as possible – proper management reporting is important if you want to make proper decisions. Fail fast if a product or project is not working – don’t let things drag on and drag the business down. Clearly communicate what you are doing and why you are doing it – hard evidence on why something is working or will work is harder to get, but makes life much easier for you going forwards.
4. The Scatter Gun approachBusinesses love to dabble on new projects, areas of the business and on new ideas. Innovation is exciting, the next big thing, the big vision, the pot at the end of the rainbow. But it is too easy to lose touch with reality and lose your focus. Too many projects on the go, with resources spread too thinly, are other good examples of how fruitful businesses can go pear shaped.
Hard lessons learned:The most successful businesses I have seen and been involved with have a laser-like focus. Yes, new ideas are great and should be encouraged, as long as you don’t lose sight of the short-term vision when looking into the future. Never forget the bread and butter of your business is right now. And never forget your customers. They can come up with new product ideas all the time. Listen and learn – especially as they could help you pay for any innovations. At the end of the day, businesses and key staff need to strike the right balance between knuckling down to the job at hand as well while being alive to new opportunities that should be properly tested and evaluated. I could go on. Only seeking funding until it is too late (think about raising money before you need it). The Cinderella entrepreneur – taking too much or too little advice but never quite the right amount to help the business. Believing your own PR. Ignoring networking….
If there is one thing I have learned, there is a difference between a lesson and a mistake. A mistake is where you have learned nothing. A lesson is where you learned something. Andy Yates is an experienced entrepreneur, business mentor, advisor and angel investor and investor director of Huddlebuy.
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