If you are a small business owner and you have never made a mistake then congratulations because you are the first person ever to do this. It is important to identify your mistakes as a small business owner, correct them and learn from them. It can be tough running your own business especially if this is your first time doing so. I have experienced some huge ups and downs in my own small business ownership career. Some days you couldn't be happier and other days you just want to give up. Here are four mistakes I have made as a business owner and what I have learned.
Not Getting Serious
In the beginning I started my business more as a side project. I noticed a need, I had the spare time and I started offering part-time bookkeeping services. I kept with it for a while but I also kept with my other full-time job. It's the classic scenario that most entrepreneurs face; they can't make the full leap for one reason or another. The most common reasons I hear are related to money and health insurance. Most entrepreneurs are not in a financial position to take a leap into running their own business. The safety of a salary and paid health benefits is just enough to keep them tied to their jobs.
My mistake was I didn't take my business seriously enough in the beginning. I didn't see the big picture of what it could offer. Years later we are growing at a pretty predictable rate and I just wish I got serious sooner. As soon as you start focusing on bigger picture tasks you realize how much you have to do and how you wish you had started planning sooner.
Takeaway: Take your business very seriously from day one always believing that it is your livelihood and a very important piece of your life. Never think small; always dream big.
Protection - Insurance, Tax & Legal
I would say most businesses are not properly protected from both an insurance and legal standpoint. As you start out you don't put the proper procedures in place like employee handbooks and formal written company policies. You will later identify this as a weakness and an area of potential liability for your business. It is much easier to establish the correct procedures and policies when you are small. Instead of fixing the problem later when it has caused you harm, handle it correctly from the beginning.
Insurance is another area that many companies don't pay enough attention to or invest enough money in the proper coverage. I take a similar approach to my business insurance as I do to my personal insurance; protect yourself and your business against life changing events. You need a good relationship with an insurance agent that understands your needs and will go to bat for you when you do have a claim. If you have a good insurance agent he won't try and sell you unnecessary coverage he will just be offering his professional advice based on your needs and situation.
Lastly, taxes will be an important consideration as you grow. Don't neglect them in the early stages because you don't think you are making enough money. Establish a good tax plan from the beginning to ensure you are not overpaying or underpaying your taxes.
Takeaway: Right from the beginning it is important to establish an excellent relationship with a good Lawyer, CPA and Insurance agent. Another area to consider is creating an excellent working relationship with a banker. Ask around your business network for referrals to service providers.
Importance of Culture
I didn't understand the importance of the culture of your business until recently. Your business culture affects your execution of your vision; either positively or negatively. Additionally your culture will change. Business culture can only be influenced but it can't be stated. You can't write down your perception of your business culture and hand it out to your co-workers. A dysfunctional culture can be crippling so be sure it is developing into something you believe in.
Takeaway: Business culture is a major influence on the success or failure of your business. It is important to keep your business culture moving in a direction that you believe in.
Leadership Style is Important
Your specific leadership style is another important aspect to consider. The way you lead your team will determine where you are able to bring the business and how you will get there. I didn't realize how much of an impact my day to day actions could have on the business. Reflecting on my past experience has definitely shed some light on some leadership mistakes. Getting upset about minor details that really have no effect on the big picture is something I am working on correcting. My determination for the business to succeed can come off as aggressive and intimidating to employees, which can be counterproductive. Lastly, my lack of patience can be a barrier to reaching our goals in a productive and efficient manner.
Takeaway: The way you lead your business is so important. Everyone has their own leadership style and way of reaching goals. It is important to identify an effective leadership style and to stick with it. Reflecting on you as a leader is tough but necessary in order to keep the business moving forward effectively.
It is important to realize the mistakes you make when running your business. Nothing is more frustrating than when someone makes excuses instead of admitting they made a mistake. Identify the mistake, accept that you made one, learn from your experience and use the information to better your business.
What mistakes have you made as a business owner and what did you learn from them?