Page: 1 2
Life as a business owner means dealing with a daily dose of challenging decisions, any one of which can have a significant effect on operations. But entrepreneurs don’t always have to be trailblazers. Here are six costly management mistakes made by those who have traveled the road before you, along with advice to help you avoid each one:
WAYS TO AVOID TROUBLE
Don’t do it all yourself. Too many business owners suffer from a dangerous case of “do-it-yourself-itis.” “Failing to understand the importance of delegating is one of the most common mistakes made by small business owners,” says Phil Wilkins, owner of Diverse Wealth Systems, a business consulting firm. “You must learn to focus on what you do best and pass off the rest to others.”
Address problems with unsatisfactory employees immediately. Discharging an unproductive or disruptive employee is an unpleasant task most business owners dread. However, failing to take action in those cases can be a costly mistake. “Once you identify an unsatisfactory employee, it’s best to face up to the unpleasant task of terminating the relationship,” says management consultant and business owner Simon T. Bailey.
Don’t introduce your business as minority-owned. Wilkins feels that including the fact that yours is an African American-owned business as part of your introduction to potential customers or suppliers is a mistake. “First and most important is that you have a viable business with significant advantages to offer your customers,” he says. After your introduction, you may be able to leverage your business’ minority status. For example, if you are a certified minority-owned business, you may bring added value to potential clients or customers who benefit from government programs encouraging relationships with minority-owned businesses.
Be cautious about hiring friends or family. Many businesses owe their success, at least in part, to an employee who is either a relative or friend of the owner. But when such a relationship doesn’t click, it can be disastrous for a small business. “Bringing a friend or relative into your business is risky,” says Wilkins. “If the relationship doesn’t work out, terminating it can [cause] serious problems.”
Don’t be too proud to ask for outside help. Entrepreneurs tend to be independent thinkers, observes Bailey. “That’s why they are often reluctant to reach out to others for help in areas where their own experience is lacking.” Forming a peer group of five to seven successful business owners (Bailey likes to call it a mastermind group) is an excellent way for a business owner to benefit from a no-cost advisory board.
Focus on customer service. Industry studies over the years have shown that, on average, it costs five times as much to find a new customer as to retain an old one. That’s why every customer complaint, even those that cost time and money to resolve, represents a business-building opportunity. According to Carl Robinson, Ph.D., managing principal of Advanced Leadership Consulting, an executive coaching firm, a profitable level of customer service requires a clearly defined and rigidly observed policy that makes customer satisfaction the goal of
Page: 1 2