By Evan Carmichael on November 22nd, 2011
Today’s post is brought to you by American Express Canada. Check out their new Amex for Business Canada Page here and vote for the winning small business story in the Take Off with American Express contest.
If you’re having a hard time getting your business up to the next level, chances are you’ve got an operational issue that you need to address.
Here are the top 5 operational mistakes that I see entrepreneurs making and hopefully you can learn from them to improve your business.
1) Trying to do it all yourself
Most entrepreneurs start off as a one man or one woman show. That’s a great way to start – you know every detail about how your company runs and you’re able to make changes on the fly.
However, as you grow your business you’ll always be limited by how much time you have. You’ll have to work insanely long hours, your quality of work will suffer, and you’ll have to say no to customers because you’re beyond capacity.
The secret to sustainable growth is to spend your time on what adds the most value to your business and delegate/outsource the rest. Start with simple admin tasks and expand as you get more comfortable letting go of some of the control, a very difficult challenge for many entrepreneurs.
2) Focusing on the product instead of the customer
When I started my first real business, my partners and I focused so much on our product and adding features that we thought would be amazing. We were our target market so it would make sense that we knew what to create.
Yet, it almost sank our company. We spent way too many resources creating features that we thought were useful but our customers didn’t really care too much about. Fortunately we had enough amazing features to still win clients over but we could have done much better.
Start talking to your customers from day one. Listen to what they want, build all of your offerings around solving their challenges and make them an ongoing part of your research and development. After all, they’re going to be the ones who are paying your bills!
3) Spending money before you’re making it
This is a common mistake for both startup companies and more established businesses. If you’re looking at creating a new product or service try not to spend money before you some coming in.
Anybody can spend money. It doesn’t take a creative genius to spend $10,000, $100,000 or $1 million. I’m sure you can find ways to spend it. This time around, I prefer to find ways to make money and then expand my marketing to make even more money when I know I have a winning idea.
Invest your time in talking to customers, doing market research, creating prototypes, etc. but not your money. Make sure you have something that people want to buy before you pour your financial resources into it. Even having just one person commit to buying is a step in the right direction.
4) Not having any accountability
A lot of us become entrepreneurs because we want to be our own bosses. While it’s great not having anyone looking over our shoulders, what most entrepreneurs lack is accountability.
Who is going to make sure you meet that big goal you set for yourself at the end of the year? What happens if you don’t make it? Who is going to push you to keep going when you feel down on your business and don’t feel like working?
The best solution that I’ve found is to start or join a Mastermind group . Connect with other business owners and have them push you to be the best entrepreneur you can be and you do the same for them. When you commit to other people and have them hold your feet to the fire you’ll be amazed at how much more productive you’ll become.
5) Carrying too much overhead
Similar to point #3 about not spending money before you’re making it, another operational blunder entrepreneurs make is spending too much on overhead.
As entrepreneurs, we’re often overly enthusiastic and believe that we’re going to achieve at a much faster rate than we actually do. It’s great to be an eternal optimist and believe you’re going to have success. Those are some great personality traits to have as an entrepreneur.
But, don’t make the mistake of buying too much inventory, renting out a huge office, or buying equipment that is way above your needs. Cash is king, especially for entrepreneurs, and you don’t want to get stuck holding too much overhead that can’t be converted into cash quickly if you need it to get through a financial crunch.
I hope you enjoyed this post and don’t make any of these mistakes as you start or grow your business. I’d love to hear your thoughts, words of wisdom or any other mistakes you’ve made as an entrepreneur, so leave me a comment below!
Once again, today’s post is brought to you by American Express Canada. Check out their new Amex for Business Canada Page here and vote for the winning small business story in the Take Off with American Express contest.
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