Five Biggest Mistakes I’ve Made in Business : Under30CEO Five Biggest Mistakes I’ve Made in Business : Under30CEO
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Five Biggest Mistakes I’ve Made in Business

| November 4, 2012 | 2 Comments

Overemploying

Dreams of having an empire and hiring hundreds of employees fill our heads from the day we first think of opening a business. As a result, each penny made is reinvested into staff, growing the company and doing what is believed to better for the company as a whole. I had 47 employees when the market changed and the recession took hold, and overnight turnover dropped. An organization’s employees are its biggest asset, but they are an even bigger liability when things get tight. High overheads are what kill a business, and even if you survive, your morale and productivity is affected by retrenching.

Lesson: rather employ fewer, but more skilled individuals. This will make your business strong and lean. Businesses operate for profit and by outsourcing skill sets outside of your immediate sphere, you and your business can become the “empires of tomorrow”.

Effective financial control

Having ineffective financial control is like driving a car with a blindfold on. Yes, you might move forward for a while, but sooner or later you are going to crash. Initially I hired friends with accounting degrees or bookkeepers. They were not well-informed on how SARS worked, tax structures and effective financial control. This resulted in money being put into projects that were doomed to fail – we just didn’t have the paper work to show us.

Lesson: Employ a highly-skilled, well-established financial controller. No matter how expensive they may seem for “playing” with numbers, they will give your business security and direction. After you have employed yourself, your accountant is next.

Celebrating a deal prior to the paperwork being signed

“A verbal deal isn’t worth the paper it is written on.” These words echo in my head as disappointments follow you throughout your career. We all know the story – the meeting that finally results in your client saying YES; you allocate resources, time and a good celebration to the new project only to find out your client didn’t have the jurisdiction or funds have run dry. Despite being an exceptionally optimistic person, life has taught me to celebrate the signed deals.

Lesson: Push for the signature or purchase order. Don’t settle for an email confirmation or the classic “please go ahead” as these are the pitfalls, we in sales fall for over and over again. Have the contract ready, so when the client says yes, they sign something straight away to get you going.

Being too involved

Startups require you to be involved in all aspects of your business, but as your company grows you find yourself still doing the things your employees should be doing. By being too hands-on you are no longer leading and you won’t have the time for vision, strategy and the bigger picture.

Lesson: Employ people who are leaders in their own right. This will allow you to rest assured knowing they are doing what is required. Two key meetings a week will ensure the attention to detail is there, and allow you to lead, as that’s the role of the business owner.

Employing your clones

You don’t realise you have done it until someone points it out. As human beings, we are comfortable around those who are similar to us. Gregarious people enjoy the company of other enthusiastic individuals. Accountants like others with logical and analytical personalities. No matter who you are, you tend to be impressed when hiring those whose traits you relate too. In my case I am a hunter sales personality with weak administrate skills. Three months after opening we had a team of six others exactly like me, and not a contract, procedure or file in sight. Once the “clones” were pointed out, I diversified completely, targeting those who were as different from me as possible.

Lesson: Choose your non-negotiable skill requirements. For me these were loyalty and big dreamers, and I only employ people who share these traits, but they have every other skill I don’t. This will ensure a strong, adaptable business team.

Michael Eilertsen is a serial entrepreneur and CEO of the LIVEOUTLOUD Group which consists of the LIVEOUTLOUD Magazine, LIVEOUTLOUD Events, TRAVELOUTLOUD and a brand new marketing initiative, PLAYOUTLOUD. The Company caters to an informed and sophisticated cliental who push the boundaries; seek individuality and who are never satisfied by the ordinary.

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Category: Personal Branding, Startup Advice