Running a business is getting more challenging, particularly in a fast-challenging market and in an uncertain economic environment.
Listed here are some deadly mistakes that entrepreneurs tend to make, and I would suggest that all entrepreneurs should avoid.
1. Underestimating the impact of change and inability to respond to it fast enough or even respond at all
The environment your business operates in is a dynamic environment. Things change all the time and even more rapidly in today’s times and age.
The entrepreneurs today need to not only keep the eyes on the horizon but also need to be able to predict the future trends and how will it impact their business.
However, local entrepreneurs are slow in responding and tend to be reactive rather than to be proactive.
For example, in a recent GST conference, among 500 participants, only 3 acknowledged that they have registered their organisation for GST.
3 out of 500? Surely the GST legislation will kick off in a matter of months.
2. Running a business based on people rather than on process and system
A business not running on system and process is not a smart business. It is probably a work and hard business.
People comes and goes, and a business wouldn’t survive if there are constant changes of people simply because it can’t establish processes that runs its business.
People are important, but consistency and stability come from a stable system.
3. Not mentoring your finance sufficiently and neglecting controls and cash flow.
Your financial results are your score and if you run your business without keeping an eye on your financial outcomes then it’s like playing football without knowing the score and the worst still;
You should be paying attention to your financial ratios and indicators as well as your cash flow.
Even a successful business is known to fail because of poor financial controls and poor cash floe management.
4. Losing focus on customer and end up becoming product focus
Myopic is inevitable especially in successful business because they have the tendency to think they know best and ignore the customers’ voice.
They start believing in their own egoistic conclusions of what is good for the customer instead of what will really make the customer want to continue to do business with you.
5. Underestimating the strength of your competitors
In the same way, some successful businesses may reach a point that they allow their ego to get the better of them, beginning to think that they are untouchable and underestimate the competitors.
Respecting your competitors is a good attitude to keep your organisation on its toe and eliminating complacencies.
6. Not having your system and processes documented and used as your operating procedures.
Documented and disseminating your systems and processes as operating manuals will provide clarity and will result in better compliances.
This probably surprises you, but I have seen some big companies that have procedures and processes changing all the time and leaving people confused and paralysed.
7. Making decisions based on emotions rather than on rationality, consensus and participation
When an entrepreneur makes decisions and his is not given a chance to provide their viewpoints and participations or does not understand the rationale behind these decisions.
- They will follow blindly and will not be able to respond independently or respond fast enough when changes happen.
- They might follow but with reluctance and lack of commitment. In these cases, optimal results are unlikely.
8.Overextending your coverage and trying to be everything to everyone instead of defining a specific market.
Venturing into either new markets or going to new products and losing sight on what they are doing well.
Not to say that you shouldn’t expand your business, but this need to be timely and done within the resource availability of the organisation.
This should be done in a way that will ensure the positioning of the organisation and its products or services are not lost.
The problem might worsen if you are expanding your business beyond the financial capability of your organisation.
9. Diversifying and losing your grip on your core business
In the same way some entrepreneurs start going to entirely new and different businesses unconnected with their core business and especially into are which they don’t know enough.
10. Inability to groom a support team and a successor
You don’t run the business for the present only. A responsible entrepreneur must plan for the future and grooming a support team as well as successor.
Making mistakes are unavoidable, inevitable indeed. The idea of living a life without making any mistakes is absurd, sort of unthinkable. Mistakes are part of lifelong learning, to create a better us.
However, mistakes are not made to be done twice.
So, let us all learn from our mistakes.
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