What Are the Most Common Entrepreneurial Mistakes? Lessons Learned from a Pro

Entrepreneurship is a journey filled with challenges and learning experiences. As a seasoned entrepreneur, I have made my fair share of mistakes. In this article, we will explore some of the biggest mistakes I made after launching my business and generating revenue. We will focus on businesses that are at least 2-3 years old, as they have passed the startup phase and are well-established.

Spending Time on Irrelevant Tasks

One of my most significant mistakes was allocating a large amount of time to tasks that did not directly contribute to revenue generation. Early on, it's crucial to channel 60-90% of your time and effort into product or service sales. As the business scales, this can shift, but it's essential to stay connected to the sales process. Being disconnected from your customers can lead to missed opportunities and a lack of insight into how to improve your offering.

Not Hiring Help Soon Enough

Another major oversight I made was delaying the hiring process. It's natural to be hesitant to bring on staff, but it's important to do so as soon as you can afford to cover salaries for 3-4 months. This way, you ensure that your business is not solely controlled by you. Most companies need about 3-5 years before you can fully focus on yourself outside the business. Hire help early to scale effectively and delegate tasks efficiently.

Allowing Poor Performers to Persist

A third critical mistake was retaining underperforming employees for extended periods. It's important to evaluate a new hire’s performance within the first 90 days and make changes if necessary. Someone should prove they can do the job within 30 days. For more experienced hires, it's essential to address underperformance promptly to protect the team and your business's overall success. Longer than a month of poor performance is unacceptable unless there are extraordinary circumstances.

Unclear Goals and Expectations

Avoiding clarity in your objectives can be detrimental to your business's success. This includes setting sales goals, defining your ideal client, and establishing expectations for employees and staff. Clarity fosters commitment and focus, leading to better outcomes. Without clear goals, you may waste time and resources without seeing tangible results.

Ignoring Financial Management

Economic management is a critical aspect of any business. While having an accounting background, running the books yourself can be challenging. I strongly recommend hiring a good accountant, even if you understand the basics. They can prepare monthly and quarterly reports and offer valuable insights into improving profitability and avoiding legal issues like tax troubles, which are common among new business owners.

Bonus: Deferring Personal Payoff for Business Growth

A frequent reason why entrepreneurs delay hiring help is they are taking too much from the business too soon. Instead, opt for deferred compensation and reinvest in your business. This strategy can provide significant returns in the long run. At least for the first 3-5 years, focus on growing the business rather than personal gain.

By learning from these common mistakes, you can make more informed decisions as an entrepreneur. Focus on crucial areas like sales, hiring, financial management, and goal setting to ensure your business's long-term success.