10 common pitfalls in an entrepreneur’s mindset
It is common lore that 9 out of 10 start-up businesses fail within the first 2 years. This article aims to outline some of the fundamental mistakes that budding entrepreneurs often make.
There is more to business than having a good idea
I remember when I started out on the entrepreneurial route. I was under the impression that generating a good idea was the most important part of building a successful business. The number of business ideas that I have generated over the years that have fallen flat on their face because of an inability to recognize the amount of work that is required to actualize them. In the grand scheme of business building very little of the hard work involves coming up with the idea. Most of the effort comes from working on all of the key processes that go into making a business successful. Project management, marketing, product development, customer relations, the ability to replicate your business, are just some of the areas that are intrinsic to the functioning of a profitable business.
Please don’t fall into the trap of thinking that a good idea naturally equates to the foundations of a sound business. Obviously ideas are the initial seed that all successful businesses grow from, but they are not the only important ingredient involved in the business building process. In the world famous book ‘E-myth revisited’ Geber draws on the important distinction between creativity and innovation.
‘Creativity thinks up new things. Innovation does new things’ Professor Levitt
Coming up with ideas is worth nothing without the knowledge and the expertise of how to implement them. Innovating is where most of the hard work begins.
The problem with selling your time
There is a huge difference between working in your business and on your business. Many failing entrepreneurs make the mistake of spending a significant proportion of their time working in their business and not on it. Unfortunately there are only so many hours in the day at the disposal of the businessman, which is why time should be spent on building systems and strategies that run themselves. Businesses that operate on a set of rules founded by objective testing overtime become self-sustainable and scalable. A scientific approach towards business is advised, because allowing subjective discretion to creep into the functioning of your business stunts its growth.
“Discretion is the enemy of order, standardization, and quality” Geber
When the entrepreneur adopts this objective mindset building systems and strategies become the centre of their focus, allowing the replication and the orchestration of a profitable business. Building systems that add value to your business is the most productive way to spend your time
Many failing entrepreneurs make the mistake of trying to focus on too many things at once. Not being able to stick to one project at a time is where many budding entrepreneurs slip up. I have fallen victim to this on many occasions. By spotting multiple business opportunities I would foolishly try to captialise on them all. My mind became full of ideas, strategies, and plans to the point where everything became a big mess. In the end my lack of focus resulted in me losing out on all of these business opportunities. Make sure that you focus on one business goal at a time. Be sure to achieve your first goal before moving onto the next one.
“If you chase two rabbits both will escape”-anon
Making unfounded assumptions
Some budding entrepreneurs forget that the business process needs to be a scientific and a rational one. Many start-up businesses make unfounded assumptions about their future success, without objectively testing to them. Maybe you have a strong guesstimate about the success of a business idea, but unless you test your plans you will never know for sure.
Never get married to your opinion
Devise ways to objectively evaluate all the structures you aim to implement in your business, no matter how small. If for example you are planning to introduce a customer support service in your business, get feedback from a sample of your customers about the intervention before launching it on a larger scale. This will provide you with information to critically assess the potential effectiveness of your planned intervention. Evaluating the key processes within your business significantly reduces the risk of failure.
Being a opportunist and ignoring the processes
Many failing entrepreneurs make the mistake of becoming overly preoccupied with the goal of making money. Obviously making money is main goal of all businesses, however thinking about making money, provides you with no information about HOW to make money. Being consumed with this outcome will take your focus off all of the key actions and processes that need to happen in order to create the desired outcome. Focusing on the outcome of having a successful business is not the same as knowing how to create a successful business.
Outcomes are just by-products of a set of processes that precede it. If the processes are flawed so will the outcome be. Keep your focus glued on the key processes that form the backbone of building a successful business. If you cannot uncover these key processes within your business, find someone that can help you, or really examine whether this business is suited to you.
“If you cannot describe what you are doing as a process then you don’t know what you are doing” W. Edwards Deming.
Broadly speaking, focusing on outcomes and processes can be paralleled to opportunistic and systematic styles of thinking.
The opportunist’s mindset is hung up on the rewards and riches that come hand in hand with having a successful business that they sacrifice valuable thinking time to generate process driven systems and strategies.
The strategist however adopts a process driven mindset that is focused on the mechanics and the key actions that go into making a business a success. If the systems and strategies behind your business are effective positive results will naturally follow.
Aim to be a strategist and not an opportunist.