Too much, too quickly
In our experience, the most common reason for people to leave their stable jobs and take a chance on their own venture is because they truly believe they can do it better. And a lot of the time, that’s true. That’s why so many small businesses run into this problem: they grow too fast.
When you have the infectious vibe of a passionate entrepreneur, and it’s backed up by genuine expertise and skill, people want in on it. You’ll find clients can start to snowball as the referrals spread like crazy. Whilst it’s a testament to how good you are, it can also wreak havoc in a young business.
Growing fast means quick hiring decisions, a lot of pressure; which often leads to mistakes slipping through the cracks, and general disarray because you simple can’t keep up with the demand.
If you start to see this happening, put the brakes on. Go back to your strategic plan and goals and make sure your decisions are made smartly, not because you’re obsessed with signing on the next big client.
Hiring out of desperation
Linking into the above mistake, waiting till the last minute to make a new hire due to cash flow, and then hiring out of quick desperation is a common hurdle that will have many business owners nodding at their screen in agreeance.
As is commonly known, hiring and managing staff is one of the most difficult facets of business owning. Finding the right people for you is a mine field and often takes time and careful interviewing. Once you’ve got them, training them up is a whole other kettle of fish. If this process is done under urgent time pressure, it’s a recipe for disaster. Either you’ll hire the wrong person and then have to go down the path of letting them go or spending way more time than you should be training them, or you’ll find the right person and because you’re so busy, completely let your newest employee down on a management front.
The key thing to keep in mind here is to chat to your accountant when you think you’re approaching the need for a new employee. They’ll be able to advise you on what you can afford and when you should look to do it. Often, biting the bullet and doing it earlier than you might be totally comfortable with will be the way to go. Back yourself!!
Skimming over the planning phase
It’s easy to get caught up in the excitement of starting a business, particularly when things start taking off for you. Your time becomes your most precious commodity and whether you’re in the first year or the fifth year of your business, the first thing that suffers is the hours you spend working on your actual business. Setting yourself up properly on this front from day one is a really important measure to take because whilst you’ll slip off the planning bandwagon sometimes, having a solid plan to always refer back to will be the surest way to keep you on the right track.
You can read a detailed article on what should go into a business plan here.
In a nutshell, if you don’t have a well thought out business plan to refer to, how do you make smart decisions? What direction are you heading in? It should be your guide that you can continue adding too and altering as you grow. This is especially important in the first year or two of business because you’re new to the game. Making decisions on the fly can sometimes pay off, but they can often lead to big mistakes. You can get offers coming your way faster than you can keep up with and the big shiny deal suddenly looks too good refuse- but it might be completely off kilter with your plan and overall business strategy.
Undervaluing your product or services
For a lot of us, this can be the biggest hurdle of all. We see small business owners undercharging and undervaluing their services all the time. It’s so hard to know where you should be sitting in the market and so easy to doubt yourself in those first couple of years when you may not have the business experience to assert yourself, and confidence to back yourself in.
Make sure you do your market research, and talk to people! Whilst you may not have the years and experience under your belt to kick off charging top dollar, that doesn’t mean you should be dirt-cheap either.
A big lesson that most of us learn very quickly is the second you let yourself be taken advantage of, that client will continue to do so. Don’t be afraid to put your foot down when you need to and question packages and prices.
Saying yes, when you should be saying no
Saying no when your cash flow is struggling, you’ve got bills and potentially a team to pay, is so, so hard. But, there’s a big but. Saying yes to people or opportunities that you know in your gut aren’t a good move, or saying yes to a big account when you simply don’t have the resources to back you, can have a significantly worse consequence on your business. As you grow and become more successful you can certainly start being more picky, but that doesn’t mean when you’re fresh that you should be saying yes to every Tom, Dick and Harry.
We’ve all experienced a client that makes your life hell, or piles the pressure so far on that your stress levels sky rocket. When that happens, the rest of your business suffers. You just can’t operate at your best under those circumstances. Just because they’re offering you the big bucks, doesn’t mean you should be sucked in.
As with any of the big things in life, you have to make a lot of these mistakes to learn from them. If you talk to people who’ve been there and done that, and make sure you get advice from various experts, then you can make the ride a little smoother for yourself.