If you're an entrepreneur, no matter how successful you might be, chances are you've made some mistakes. Some of those mistakes are recoverable, and some aren't. What ultimately matters is how you handle those mistakes and how you recover from them. I've made plenty of mistakes, and I'd like to believe that I've managed to learn the lessons that I needed to from them.
With that said, let's get on with them, shall we?
Mistake 1: Relying on advertising to find clients or customers for your business, especially in the early days.
Depending on what kind of advertising you have in mind, costs can vary from moderate to incredibly expensive. When you're a small business, you're going to be growing your business based on relationships and on word of mouth. If you are trying to rely on advertising, you're going to spend a lot of money for very little in returns. Allowing the budget to grow too big for advertising can easily sink your budget. All of those "boosts" that you pay for on Facebook can eat your budget alive. Google Pay-Per-Click, if not optimized properly, will be just like flushing money down the drain. If you happen to make the mistake of paying the wrong person to handle your advertising, as we did, you can flush tens of thousands of dollars right down the drain in record time.
Mistake 2: Hiring too fast.
What I've learned is that I have to be making multiple times an employee's salary before hiring anything out. Yes, that does mean that you end up running around like a chicken with its head cut off. But in the early days, conserving cash so that you can get your company to a viable state before hiring anyone is critical. It's tempting to hire people; it feels great. Having to let them go because you ran out of money is far worse. Don't hire anyone until you are really ready. You might be able to get a lot of mileage out of hiring fractional employees, or someone who can do a part time gig for you before committing to the cost of a full time employee with full time costs. The double benefit is that hiring a contractor (in the true contractor sense) is that you also don't have to pay employer taxes.
Mistake 3: Paying too much.
I came from the technology field where salaries are quite high. What I learned is that other industries and fields have a very different pay rate than the technology industry. That means that I overpaid in the early days. I've had to learn to be aggressive when negotiating salaries so that I'm not overpaying. I'm sure some employees enjoyed the ride while they could, but it wasn't good for my bottom line.
Mistake 4: Not setting goals and deadlines.
People need goals and deadlines in their jobs. Of course, the goals and deadlines need to be realistic. Having expectations of how quickly someone will master a particular task is important. If you have sales people working for you, it is entirely reasonable to have a quota system in place so that if they do not make adequate sales you can let them go.
Mistake 5: Not getting an office early on.
I learned my lesson with this one. If you have employees, you need an office. I love the idea of working from home, but the reality is that people will take advantage, no matter what they're telling you. This will also enable you to keep all of your paperwork in a central location. When we moved into our office, we spent months trying to find vitally important paperwork. This was after key people swore up and down that everything was sorted and well organized. Lesson learned. Keep all of your paperwork and people together.
Mistake 6: Buying meals and spending on the company dime.
I had employees who started to feel entitled to taking lunches on the company dime. If they were meeting over lunch, they were eating on our dime. We had to nip that in the bud. That also meant that the owners (me included) had to quit eating on the company dime, as that was quickly eating up our revenue.
Mistake 7: Not taking time for myself.
Being an entrepreneur is a long, lonely job at times, and you will get burned out if you don't take care of yourself. I've had to learn this one the hard way, just a few times. Taking care of myself, getting enough sleep, and spending time away from the job is critical. Even though I love what I do, I can still get burned out. If I push too hard too many days in a row I end up feeling singed around the edges. Then I have to spend crucial time resting up and healing. That's not good for anyone, or for my business. Getting proper sleep is absolutely critical for my health and for the health of my business.
Despite the fact that I've made every single one of these mistakes, and some of them multiple times, I recovered from all of them. If you recognize that you're making these mistakes and adjust accordingly, you can recover also. By adjusting, and adapting, it's quite possible to overcome these mistakes, and go on with your business.
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With that said, let's get on with them, shall we?
Mistake 1: Relying on advertising to find clients or customers for your business, especially in the early days.
Depending on what kind of advertising you have in mind, costs can vary from moderate to incredibly expensive. When you're a small business, you're going to be growing your business based on relationships and on word of mouth. If you are trying to rely on advertising, you're going to spend a lot of money for very little in returns. Allowing the budget to grow too big for advertising can easily sink your budget. All of those "boosts" that you pay for on Facebook can eat your budget alive. Google Pay-Per-Click, if not optimized properly, will be just like flushing money down the drain. If you happen to make the mistake of paying the wrong person to handle your advertising, as we did, you can flush tens of thousands of dollars right down the drain in record time.
Mistake 2: Hiring too fast.
What I've learned is that I have to be making multiple times an employee's salary before hiring anything out. Yes, that does mean that you end up running around like a chicken with its head cut off. But in the early days, conserving cash so that you can get your company to a viable state before hiring anyone is critical. It's tempting to hire people; it feels great. Having to let them go because you ran out of money is far worse. Don't hire anyone until you are really ready. You might be able to get a lot of mileage out of hiring fractional employees, or someone who can do a part time gig for you before committing to the cost of a full time employee with full time costs. The double benefit is that hiring a contractor (in the true contractor sense) is that you also don't have to pay employer taxes.
Mistake 3: Paying too much.
I came from the technology field where salaries are quite high. What I learned is that other industries and fields have a very different pay rate than the technology industry. That means that I overpaid in the early days. I've had to learn to be aggressive when negotiating salaries so that I'm not overpaying. I'm sure some employees enjoyed the ride while they could, but it wasn't good for my bottom line.
Mistake 4: Not setting goals and deadlines.
People need goals and deadlines in their jobs. Of course, the goals and deadlines need to be realistic. Having expectations of how quickly someone will master a particular task is important. If you have sales people working for you, it is entirely reasonable to have a quota system in place so that if they do not make adequate sales you can let them go.
Mistake 5: Not getting an office early on.
I learned my lesson with this one. If you have employees, you need an office. I love the idea of working from home, but the reality is that people will take advantage, no matter what they're telling you. This will also enable you to keep all of your paperwork in a central location. When we moved into our office, we spent months trying to find vitally important paperwork. This was after key people swore up and down that everything was sorted and well organized. Lesson learned. Keep all of your paperwork and people together.
Mistake 6: Buying meals and spending on the company dime.
I had employees who started to feel entitled to taking lunches on the company dime. If they were meeting over lunch, they were eating on our dime. We had to nip that in the bud. That also meant that the owners (me included) had to quit eating on the company dime, as that was quickly eating up our revenue.
Mistake 7: Not taking time for myself.
Being an entrepreneur is a long, lonely job at times, and you will get burned out if you don't take care of yourself. I've had to learn this one the hard way, just a few times. Taking care of myself, getting enough sleep, and spending time away from the job is critical. Even though I love what I do, I can still get burned out. If I push too hard too many days in a row I end up feeling singed around the edges. Then I have to spend crucial time resting up and healing. That's not good for anyone, or for my business. Getting proper sleep is absolutely critical for my health and for the health of my business.
Despite the fact that I've made every single one of these mistakes, and some of them multiple times, I recovered from all of them. If you recognize that you're making these mistakes and adjust accordingly, you can recover also. By adjusting, and adapting, it's quite possible to overcome these mistakes, and go on with your business.
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