6 Common Mistakes First-Time Business Owners Should Avoid

6 Common Mistakes First-Time Business Owners Should Avoid

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Famous playwright Oscar Wilde summed up the essence of experience by stating that “experience is simply the name we give to our mistakes”.

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New businesses require skills in a wide variety of disciplines: from accounting and strategy to marketing and legal; from human resources to product / service design. And as businesses grow in people and resources, the founders of the business acquire the ability to delegate some of these roles.

But, at first, most CEOs are involved in virtually every aspect of their business. If you are one of them and have expertise in, say, one or two areas, the wide range of questions you need to answer – with little or no prior experience to build on – weighs on those first years of running a business with challenges. It is therefore not surprising that 80% of all businesses fail in the first 18 months.

For any new entrepreneur competing with these ratings, nothing is more critical than shortening the learning curve and putting your business on solid financial footing. Here are six common mistakes new business owners should avoid to improve their chances of success:

1. Leave your ego at the door.

Success in business is often nothing more than making a series of good decisions. The catch is that it is not easy to systematically select the best choice. And despite the common perception, one of the biggest obstacles to good results is not a lack of information or skills, it is the inability of a leader to put aside his ego.

In short, exceptional leaders are ready to make a mistake. They develop the ability to select the best idea, whatever the source. If you want to be successful in starting a business, invite them to comment and keep an open mind. If you can do it, you are much more likely to do what is right for your business.

2. Don’t treat everyone the same.

Learning to manage people is a skill that takes time to acquire; it’s not something you were born with. One of the common misconceptions about management is that leaders must have a particular style and demand that others follow it. Nothing could be further from the truth.

Whatever your business, your employees are your most important asset. As a leader, your job is to make the most of it and the best way to do it is to understand them as individuals. So take the time to identify how to motivate everyone and realize how he or she reacts to your comments. If you can adapt your style to align with what works best for each individual, you will have a huge impact on their performance.

3. Don’t hire too quickly.

Large companies have the luxury of significant resources, allowing them to invest in the hiring process. Typically, they subject applicants to multiple job interviews, sometimes up to eight or nine. Why spend so much time with a simple rental?

These companies understand that the cost of hiring the wrong person is a considerable waste of money and time. Small businesses, on the other hand, generally limit interviews to the candidate’s future manager, and perhaps the CEO. Don’t fall into this trap.

When you are little, each individual can have a disproportionate impact on your business. The way in which these people integrate into the team, the alignment between their skills and the requirements of the position and their adherence to the vision of the company are all essential to the creation of a dynamic and powerful team. So take a good look at your candidates and if you can hire them as consultants for a few months to “try before you buy”, that’s even better.

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4. Admit your weaknesses.

Even the most talented people have strengths and weaknesses. One of the simplest mistakes a new CEO can make is to ignore these gaps. Maybe you were good at math, then you think you can handle the accounting for your business. Or, you have taken a course in business law while obtaining your MBA and you think that you are somehow qualified to examine simple legal agreements.

The best executives know what they are doing well and what they are not doing. And their key hires and valuable consultants make a valuable contribution in areas where they lack experience. Don’t try to be a superhero.

5. Spend time planning.

Most new businesses start because the founder or team has solid expertise in a specific area. This is a great advantage as it greatly reduces your learning time. But moving from the role of practitioner or product engineer to running the whole business is important. So take the time to plan. In the immortal words of Benjamin Franklin, “If you don’t plan, you plan to fail.”

6. Consider that alignment, not consensus, is the goal.

Successful teams exhibit many behaviors: shared vision, passion for work and honest communication, to name a few. But many small teams mistakenly assume that everyone agrees, it’s always optimal. In addition, these teams will compromise the best solutions in order to obtain a consensus.

This may be understandable; but it’s the wrong way to run a business. Encouraging vigorous debate and scrutinizing competing points of view is the process that generally works best. As long as critics are on board and the team aligns with the plan or vision, differences of opinion, not consensus, should be the goal.

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