Top 5 Operational Mistakes Entrepreneurs Make

Business-Operations

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.

About the Author

I #Believe in entrepreneurs.

68 Responses to “Top 5 Operational Mistakes Entrepreneurs Make”

  1. Top 5 Operational Mistakes Entrepreneurs Make:
    Today’s post is brought to you by American Express Canada. Check… http://t.co/Gew4WvLi

  2. RT @EvanCarmichael: Top 5 Operational Mistakes Entrepreneurs Make http://t.co/vt3MNZ4M

  3. Top 5 Operational Mistakes Entrepreneurs Make http://t.co/O0v2HEVr – Excellent post by Evan and yes I have made all 5

  4. richard beny says:

    Hi Evan,

    I’m a business student and a leader of our school organization. My school dean assigned me as a manager on the shop built for business students. I was given a task to think of a specific product that will be developed and to be produce in the market. weeeew! But good thing I have my associates to help me out. I don’t put too much pressure on myself because I know my capacity. I divided my associates to specific tasks and right now we’re 75% done on our business plan. Good thing I’ve read your piece.

    I hope you will post more in the future. Have a good one!

    rich

  5. jimmy g. says:

    Before, I always make sure that my products look good to attract more customers. However, I put too much money on developing my products without thinking I’m already carrying too much overhead. To all the entrepreneurs, I hope you don’t make the same mistake. Thanks Evan, I’ll watch out for posts like this.

  6. Henry Cane says:

    Very good piece you got here Evan!

  7. Gerald Pete says:

    I always put too much pressure on myself. I should learn how to delegate.

  8. harold foil says:

    ” It’s great to be an eternal optimist and believe you’re going to have success. ” — I’ll make sure to keep this in mind. Thanks for posting!

  9. Rob de Heus says:

    RT @EvanCarmichael: Top 5 Operational Mistakes Entrepreneurs Make http://t.co/vlmUJvK7

  10. RT @andrew_ob: Top 5 Operational Mistakes Entrepreneurs Make http://t.co/9EztpFob – Excellent post by Evan and yes I have made all 5

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  12. RT @andrew_ob: Top 5 Operational Mistakes Entrepreneurs Make http://t.co/9EztpFob – Excellent post by Evan and yes I have made all 5

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  14. John Spence says:

    Nailed it!!!!!!!!!!!!! I might add not keeping an eye on cash-flow and hiring “friends and family” instaed of the truly BEST talent. But really — this list is superb. I have worked with several dozen start-ups and most of them have fallen into one of more of these traps. This info is spot on!!

    1. Thanks John – glad you like the list and thanks for commenting!

  15. John Spence says:

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  16. A buena horas mangas verdes #autonomos RT @EvanCarmichael: Don't try to do it all yourself. http://t.co/GfLy8zLz

  17. A buena horas mangas verdes #autonomos RT @EvanCarmichael: Don't try to do it all yourself. http://t.co/GfLy8zLz

  18. A buena horas mangas verdes #autonomos RT @EvanCarmichael: Don't try to do it all yourself. http://t.co/GfLy8zLz

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  21. Stavros D says:

    "@EvanCarmichael: Don't focus on the product instead of the customer. http://t.co/MuKtWHdb" simple, yet informative! Great job Evan!

  22. richmond Far says:

    This is perfect for me since I’m just starting up my business. I’ll make sure to avoid all this mistakes.

  23. Fritz Ray says:

    Thumbs up to the author!

  24. Jan Rodrigo says:

    great job!

  25. Gary Y. says:

    Nice list Evan. As always you nailed it!

  26. Mitchel says:

    When I was a start-up I did all of this. Good thing I was able to recover my losses.

  27. Ara F. says:

    I would love to read more like this. Thanks for sharing.

  28. Amber R. says:

    Perfect list. I’ll be watching out for more list like this.

  29. Ellen Cabrero says:

    great list you got here. Thanks for sharing.

  30. Justin Perez says:

    I really like this list. Thanks for posting.

  31. Rhea Mars says:

    Thanks for the posting. I really enjoy reading it — I saw myself doing those before. Lol..

  32. 99Launches says:

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  33. ryan Chuo says:

    I really enjoy reading your posts. I’ll watch out for more like this.

  34. Gregor Fend says:

    I’m always not comfortable giving up important task to someone. But I guess I’ll have to compromise. Thanks for posting!

  35. geEkEntrep says:

    You rock! Thanks for the reminders.

  36. bizIdol says:

    The thing is if you already committed these mistakes try to avoid them in the future. Thank you for sharing Evan.

  37. worlddream2 says:

    Don't focus on the product instead of the customer. http://t.co/wNk51aTy

  38. mitra j. says:

    Very effective post. Thank you so much for sharing.

  39. celeb-george says:

    I have been following your weekly post Evan, and as always — you nailed it!

  40. martin says:

    This list inspires me to venture more with proper precautions. Thanks for posting Evan.

  41. anthony_ says:

    “don’t make the mistake of buying too much inventory, renting out a huge office, or buying equipment that is way above your needs.”– very well said.

  42. ImyK says:

    Indeed!–Cash is king!

  43. Tina_lee says:

    Carrying too much overhead-the biggest mistake I’ve made.

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  45. Don't spend money before you’re making it – http://t.co/wNk51aTy

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  48. Bonnie Diaz says:

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  59. The Xemplar says:

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  65. Don't focus on the product instead of the customer. http://t.co/DKTbJUXN

  66. Don't focus on the product instead of the customer. http://t.co/pzErtQ3j

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