Starting and then running a business can often feel like navigating a minefield.
There is no exact science to define what makes a business success, while the list of factors that can cause one to fail rivals War and Peace in length. What’s more, no matter how exhaustive the ‘fail list’, I’d bet it would still not cover every potential pitfall since many issues might not even cross your mind until they occur.
Having said that, there are a number of common mistakes that are completely preventable – and the best way to mitigate against them is to understand them and put plans in place to ensure they are avoided.
So let’s start with these five.
1. Avoid making decisions by committee: There is an old saying that goes, “A camel is a horse designed by committee” – and that is a fantastic way to describe this all-too-common mistake. Why? Well, just go and ask five people what colour to make something simple like a brochure and see how many conflicting opinions you get. Talk about a waste of time.
I should make clear however that I am not advocating forgoing other people’s advice entirely. Absolutely not. But you should focus on getting the right feedback from the right people on the right topics. Too often opinions are collected simply because it seems like the right thing to do, rather than because they have something to add. This amounts to plain old quantity over quality, and has no place in a successful business.
Aside from simply being overly complicated and time-consuming, decision by committee can also lead to missing the best advice as you’re too focused on giving everyone equal billing. What’s more, dilution of responsibility can lead to team members suggesting ideas for the sake of it, instead of you soliciting the best ideas from the most relevant people then showing leadership in how you move forward.
Too often opinions are collected simply because it seems like the right thing to do, rather than because they have something to add.
2. Avoid being the “idea-a-day guy”: Ideas are great. The problem is when someone thinks that simply having the idea is job done. Any idea, however good it may be, is just a tiny fraction of the work.
Quite simply, businesses do not succeed because someone has a eureka moment in the bathtub. They succeed because that same person then dedicates their time and effort to establishing whether or not that idea is workable and lays down blood, sweat and tears to make it a reality.
That’s why successful entrepreneurs do not throw ideas into the mix at a faster rate than they or their teams can put them into action.
Brian Sharples, CEO of HomeAway Inc and contributor to the Wall Street Journal said of this notion, “The idea is really only a small part of the process of finding a business gem. The real work is done assessing the idea’s viability.”
Sharples explains that the eureka moment for his business wasn’t the idea to start a vacation rental marketplace, but the realisation of exactly how to make it a success.
3. Avoid breaking the law: This one should be obvious, right? Well as the long list of CEOs that have spent time in the slammer goes to show, it seems like it isn’t clear to everyone – Bernie Ebbers, Jeff Skilling and Martha Stewart to name a few. And it’s not just famous corporate high-flyers who fall foul of the law. There are a lot of stories out there about CEOs cutting corners, bending rules and fudging information simply to make (or downright steal) more money.
Keep in mind this saying: “When you’re on the side of the law, you can swing and miss. When you’re a criminal, you only have to miss once.” And when you do miss, the fallout is severe – we’re talking potential insolvency and jail time, not to mention the damage to both you and your company’s reputation.
And aside from the possible repercussions for yourself, keep it mind the moral burden too. Many believe that when a corporation or institution is the target of crime (either from outside the business or from within) that nobody gets hurt. As the case of Enron goes to show, this could not be further from the truth. When the energy giant collapsed, it took with it thousands of people’s jobs, pensions and savings – robbing them of their livelihoods and their futures.
4. Avoid the hot and cold emotional outbursts: “…meet with triumph and disaster. And treat those two impostors just the same.” Find me an entrepreneur who claims never to have lost their temper at work and I will show you a liar. With the emotional ups and downs that running your own business brings with it, we are all liable to a mood swing every now and then. In fact, the UK’s Mental Health Foundation recently found that some 45% of us admit to losing our temper at work.
When it comes to running a business, it is the entrepreneur who takes a long-term, consistent view of things who tends to succeed.
However, just because it is quite common doesn’t mean you shouldn’t do all you can to avoid it – both for your health and the success of your organisation. From a physical and emotional standpoint, our risk of heart attack increases eightfold shortly after an emotional outburst. This is according to research by the Duke University Medical Center who also found that mood swings and outbursts of anger often correlated with a higher incidence of disturbed sleep, stress-levels, irregular heartbeat and stroke.
And it’s not just about losing your cool, but rather maintaining perspective. When it comes to running a business, it is the entrepreneur who takes a long-term, consistent view of things who tends to succeed. This is far more effective than those who flit from euphoria to despair from one minute to the next.
5. Know when to relax – and when not to: Everyone needs a break – in fact taking breaks and sleeping well will do nothing but help your business.
But…when you’re on, you’re on. When you are not relaxing and spending time away from your business, your mind should be ticking over with the burning questions – are the finances in order? What is the competition doing? How can we improve our offering? Is it time to grow?
Any successful entrepreneur is utilising every second of their day, constantly thinking how to improve their business.
And the truth is, these thought patterns are not all that stressful to successful entrepreneurs who live and breathe their business and are always looking for ways to improve. If anything, it is thoughts like these that keep them going – pushing their business forward and striving always to be the best.
So how did you get on? If you feel like you have already made or are still making some of the mistakes on this list, don’t worry. As former American basketball coach and inspirational speaker John Wooden once said: “If you’re not making mistakes, then you are not doing anything.”
Wooden was right, mistakes are part and parcel of both business and life in general and can offer an invaluable opportunity to learn.
So avoid what you can, and learn from what you can’t.
Neil Petch; Chairman at Virtugroup
With a history of business successes, Neil Petch is well known in the UAE and beyond as a visionary entrepreneur with a passion for helping others establish and grow their own businesses. Neil founded Virtuzone in 2009 and quickly established it as the region’s leading company formation expert, before launching Virtugroup, a holding company that has a wider mandate of supporting startups from establishment; to successful market entry; and all the way through to exit.