Last week we covered six of the 12 biggest mistakes most small businesses make. Here, in my humble opinion, are the other six:
Number 7: Working in the business rather than on the business. Many self-employed people think they are entrepreneurs but really aren't. They work full time 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 making detailed plans for achieving them. Of course, you'll have to deal with an occasional interruption, such as 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: Why Small Businesses Don't Work and What to Do About It" 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 draining the swamp. Let your staff deal with the reptiles — er, customers — to give you more time to dream.
Number 8: Ignoring your legal, tax and regulatory environment. The U.S. government has its hands in every business in America. No business 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 avoidable.
Number 9: Creating a workplace culture that alienates employees. People used to say that successful businesses first take care of their customers, then take care of their employees and then take care of their shareholders. Somehow, the employee piece has disappeared over the last 30 years, and America's big companies have suffered as a result.
Your employees are the front line of your business's image and reputation. When employees aren't motivated, it shows. The quality of your customer service suffers. If you come to the entrepreneurial world and create a toxic work environment — especially if you've worked in a toxic office yourself — shame on you.
These days, employees — especially millennials — don't just want a paycheck; they want their work to have a purpose. They want the opportunity to have a positive impact on the world, to make a difference. Treat them like costs and they will move on. Or worse, they'll 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.
Number 10: Lacking a succession plan. 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. But before that you will slowly and imperceptibly lose the ability to manage your business from day to day.
Who do you want to take over the business? 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 to make it easier for your successor to seamlessly transition into the business. As the Bible says, no one knows when their hour will come.
Number 11: Worrying too much about what other people think. Your reputation is important, but getting 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 feel like yourself in the morning.
Number 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.
—Is one you are proud to own.
Cliff Ennico (crennico@gmail.com) is a syndicated columnist, author and former 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.
Photo credit: Richard Leeming
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