There are potholes in the road to owning a business

The musical chairs game of downsizing is leaving people without chairs. And many are starting their own businesses. Others are leaving on their own. They are sick of companies being in control of their fate. They want to chart their own course, be their own boss and make it big.

But what many entrepreneurs don't discover until too late is that there are a lot of pot holes on the road to success. Starting a company from scratch is tough. They don't call it sweat equity for nothing. Here are a few of the biggest holes in the road to miss as you drive toward success. These entrepreneurial mistakes are the most typical:

1.      Egos get in the way. Some entrepreneurs confuse who they are with the business they're building. They are unwilling to listen to anyone else's ideas about improvements because they take it as a personal criticism.

2.      They believe that they are the only one who can do it right. They don't let go. Every decision must be delegated upward, no matter how trivial. Meanwhile, capable employees wait in frustration and eventually leave because they don't have a chance to take an idea and run with it.

3.      They expect people to read their minds. Because they try to do it all, they forget to tell other people what they need to know to be successful on their jobs.

4.      They don't hire or outsource soon enough. Typically, entrepreneurs who are trying to get their business off the ground are like circus performers spinning plates on sticks. Just when they get one spinning another one falls and crashes to the ground. They try to do it all, instead of hiring someone or outsourcing those things that the business owner doesn't do well. Although it does take a nip out of the owner's income, it can be well worth the expense if they are freed up to focus on what they do best.

5.      They don't hire smart. They wait too long and then when things are out of control and slipping through the cracks they patch the hole with any warm body they can find. Often, friends of employees and the owner’s relatives are brought into the organization without much forethought. This stew pot tends to simmer along for awhile but eventually it comes back to haunt the owner when nepotism issues and office politics begin to undermine effectiveness.

6.      They don't take enough money out of the business. I met a man who started a company five years ago and hasn't taken much of a salary in all those years, even though he was making enough to bring home a modest sum without hurting the business. He was reinvesting his profits in building the business. The problem was that his family was suffering and he was running on empty. His wife was ready to leave him. He was worn out from trying to reach some magic level of success before he took out a living wage for himself. Building a business is hard work. It's important to get some rewards for all that effort, so that you and your family feel that it's worth it.

7.      They take too much money out of the business. An entrepreneur I met a few years ago loved to travel. The problem was that travel seemed to be his first priority. He milked his company for every nickel, taking large sums of money for African safaris and cruises. In the meantime, he wouldn't invest in the business. His employees needed tools and computers to do their work but he wouldn't approve the expenses. He would lecture his employees to work harder but they began to resent him. They felt that he was enjoying life at their expense and that they cared about the business more than he did.

8.      They don't fire soon enough. Most experienced entrepreneurs have a story or two about this one. They talk about how they held on to someone too long, in spite of the fact that the person was a poor performer or no longer fit the business. It's very difficult to make these decisions because owners often feel that the person was there during the early days and they don't want to admit that they have to go. I've even seen situations where the long-time employee was seriously damaging the business, losing customers and badmouthing the owner, yet the owner could not see the situation objectively.

9.      They don't make the transition from starting the business to managing the business. Many entrepreneurs are creative, energetic types who love starting things but hate managing people, and all the administration that goes along with growing a business. Unfortunately, they don't know when to step aside and let someone else do it.

10. They don't get outside boards soon enough. Owners sometimes resist bringing in outsiders because they like the freedom of doing anything they want. Unfortunately, they close themselves off from some new ideas and the honest scrutiny that every business needs.

11. They don't admit they don't know. Sometimes an entrepreneur is afraid to admit that they don't understand. After all, they're the owners and they're supposed to have all the answers, right? They try to do all their own marketing and advertising, or they'll resist the idea that the business needs computers just because they don't know how to use one.

12. They think they are above the systems everyone else must follow. They over-promise things to customers, fail to fill out necessary paperwork and generally ball up the works. Then they wonder why their employees are unable to provide good service.

If you're an entrepreneur, ask your employees which ones you could improve. It might be the best business builder you ever thought of.


Joan Lloyd is a Milwaukee based executive coach and organizational & leadership development strategist. She is known for her ability to help leaders and their teams achieve measurable, lasting improvements. Joan Lloyd & Associates, specializes in leadership development, organizational change and teambuilding, providing: executive coaching, CEO coaching & leader team coaching, 360-degree feedback processes, retreat facilitation and presentation skill coaching and small group labs. Contact Joan Lloyd & Associates at (414) 573-1616, mailto:info@joanlloyd.com, or www.JoanLloyd.com 
 
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