Common mistakes most entrepreneurs make while running a business

 1.   Not setting attainable goals.

Entrepreneurs can be so enraptured by their “big idea,” and knowledge of their business that they work without a solid plan. But the reality is you must set realistic, and attainable goals in order to succeed. Make a point of setting both short- and long-term goals, and make sure they’re specific. Don’t just say, “I want to make Rs.2 Crores this year.” Set a reasonable goal, and then determine what specific steps you need to take to reach it.

These goals should then be cascaded down to define S.M.A.R.T. KRAs (Key Result Areas) of each employee in the organisation forming the basis of the rewards and recognition process. This creates accountability and drives results.

2.   Turnover focussed rather than margins focussed

Having a healthy profit margin will be critical to your success. Setting it too low now will make life infinitely more difficult for you in the future -- your customers likely won’t be thrilled when you need to raise your prices later on. Focussing on turnover and not margins often leads to companies being buried under debts that they cannot recover from.

Take a look at your production and operating costs, and determine how much flexibility there is. Can you reduce these costs in the future if necessary? If not, choose a higher profit margin now to accommodate these costs. If some part of the turnover is creating a dent in your bottom line consider if dropping it will be profitable. More often than not, a business with 10 Cr turnover and 1 Cr profit is better than a business which is 50 Cr turnover and only 50 lacs profit.

3.   Suffer from Perfection Syndrome

The reality behind perfection syndrome is fear. They are characterized by undermining their staff, usually by way of controlling behaviour manifested in the ways that he or she finds it difficult to delegate. Most Entrepreneurs don't delegate because they cannot trust their employees. This often comes out of their own insecurities, or the underlying reason that they hired ‘not so competent staff’ in the first place to save on costs. You must learn to let go to grow, because you are not a superhuman who can alone do the job of an entire team. You must master the art of insalubrious success because perfection is a myth. There will be failures, there will be mistakes made by managers. It’s absolutely fine as long as a lesson is learnt and the same mistakes are not repeated again and again.

4.   Do not invest time, effort and money to build the right team

It is imperative as an entrepreneur to assemble a ‘core-team’ of talented individuals who are competent and trustworthy enough to run critical business functions in your absence. This gives you the luxury to focus on strategic planning while your managers handle the company’s daily operations that are unworthy of your attention.

Your success lies in multiplying yourselves. Attracting the best talent can keep productivity high and goals on target. The right employees and associates can help you maintain a higher quality standard throughout every facet of your business operations, from idea generation and task execution to big-picture collaboration and workplace morale.

Nurturing your team so that growth doesn't become stagnant is the key. Additionally, simply investing the time to provide one-on-one feedback, quarterly evaluations and team-building exercises is a cost-effective way to retain a sharp team that contributes to your shared success.. Yes, building a Team comes at a cost: But, remember cheap and talent don't go together. The key here is to think of it as an investment, an Investment that compounds over time.

5.    Do not drive marketing & selling proactively

Sales & Marketing are the lifeblood of any organization. More often than not most entrepreneurs like to focus on doing what they are good at and hence more often than not neglect sales and marketing. You cannot depend on luck, fate and chance. You don’t have to like it, but sales is one of the essential skills and actions entrepreneurs need to have to have a successful venture. To become a successful entrepreneur, you need to be able to sell well – to your investors, to your customers, to the people you want to hire. Having a great idea is not enough if you can’t pitch it right. In the end, it is all about selling. The lack of confidence will definitely harm your investor pitch. If you can’t pitch investors, your business will suffer.

Face it; you are either an egoist who thinks being a sales person will hurt his pride or a coward who is avoiding the activity because of fear and insecurities. Apologies, if that language hurts but somebody has to tell you the truth. Ego is good to have for an entrepreneur. The ego entrepreneurs possess – and the belief that goes with it – helps them to create a faith in their vision. Ego should not become a impediment to their own success.

The thought that you are not good at something or the fear that others will make fun of you might be the reasons why you prefer to stay away from the spotlight.

Being insecure can be very dangerous. It will definitely hold you back. You need to do something about it and do it quick. When you face your insecurities, you may be surprised how much you have exaggerated them in your head.

You need to believe in what you are selling in order to make others see the potential. Don’t focus on the weak spots of your business, but on the potential, on the value your product brings and the opportunity it presents to the investors. Investors won’t pass if they see the potential, so present it to them along with all the passion you have for your business.

This doesn’t mean you need to necessarily be the Sales Manager of the organisation. You certainly though need to be involved in the sales & marketing activity. You need to be ready to go out on positioning calls, investor meetings, monitor sales and marketing dashboards continuously and hold sales reviews regularly.

6.   Do not build systems

Systems and protocols are a proven way to ensure efficiency and accountability. It is, therefore, necessary that no matter how small your organisation, you set these systems in place early on. Many small and medium-sized business owners object to systems saying that they only slow things down. But this is because these entrepreneurs do not have adequate knowledge about the topic of ‘systems’ and their ideas on the subject are rooted in traditional sciences around process building and compliance, which are out-dated, and are not agile enough for small and medium-sized businesses. It is important to recognise that systems help you deliver consistently and reduce dependency on people and yourself. However just building systems is not enough. You need to follow through on systems and drive its implementation. It is important that you act as a role model for your organisation by defining and following a system for yourself. It is important that you build simple and sustainable systems.

 7.   Do not celebrate progress.

When was the last time you took time out of your busy schedule to acknowledge (let alone celebrate) your many accomplishments? As entrepreneurs, we spend a lot of time obsessing about the future. Yet, when we complete a significant goal, we have been conditioned to immediately move onto the next goal rather than celebrating our wins. When you don't take the time to celebrate your many accomplishments, you have a high probability of burning out.

Celebrating your wins not only feels great physically, but it reinforces the behaviour you want to show up when you face a new challenge or opportunity. Conversely, if you fail to celebrate your many accomplishments, you are training your brain that what you are doing isn't all that exciting and important. Simply put, the lack of celebration will lead to a feeling of emptiness that will result in less focus and decreased performance over time.

Success begets more success, so it's only natural to build upon existing momentum; especially during events of celebration. As you look to grow your business, celebratory events not only reinforce the positive aspects of what you are doing, but positions your business correctly as a desirable company with which others would like to associate.

Perception becomes reality. As you celebrate your wins, others look for ways to participate in what you have successfully built, teams feel encouraged and engaged. And an encouraged and engaged team always delivers better results.

 8.   They hate criticism

Criticism is information being provided that helps you improve your business. If you are avoiding criticism, then you do not want to ensure that your business is providing your customers with value. If being told that what you are doing is wrong, then being a business owner is not what you should be pursuing. You need to have tough skin, and know how to see criticism as feedback in order to build a successful business.

Encourage your team to ask questions, table their suggestions and argue their case with conviction and facts supported by data. Build a culture of openness and not ‘Yes Men’. Synergy is important. If the vision, mission and goals are aligned, differences become complementing and give birth to a valuable asset called Synergy.

 9.   Do not invest in their own learning

Business is a science. There are methods and templates to structuring your business model in a manner that it is profitable. All functions in the business are a science and can be made efficient using proven templates and processes .Unfortunately no school, colleges or university has taught us these sciences. These come from real world education. Even when you are successful, there is always a next level. Remember, businesses that stop learning and reinventing themselves, collapse.

The most successful entrepreneurs have mentors and coaches who help them get to the next level and avoid mistakes they have made themselves. Mentors provide valuable insight about how to create a successful business based on the knowledge and experience they have gained over the years. You need these people in your corner to advise you about important decisions you plan to make. The connections you make as an entrepreneur are valuable relationships that can move you further along than your competitors who have not established these types of relationships.

What I’ve just explained to you above is the hard truth. In a society that encourages people to chase their dreams, with little regard for the consequences, I implore you to access the situation you as a business owner is in, and act accordingly. Self-employment is a terrible trap that consumes everyone who unsuspecting finds their way into it, and the only way out is to give up and get a job, which is, of course, unacceptable for those with an entrepreneurial spirit, or make a change. The choice is yours.

If you feel you need help in all or any of these areas, do not hesitate to write to me @ rakhechanavin@gmail.com