10 common mistakes in the mindset of an entrepreneur
It is a common tradition that 9 out of 10 startups fail in the first 2 years. This article aims to outline some of the fundamental mistakes budding entrepreneurs often make.
Business is more than having a good idea
I remember when I started out on the entrepreneurial route. I was under the impression that generating a good idea was the most important part of building a successful business. The number of business ideas that I have generated over the years that have collapsed due to an inability to recognize the amount of work that is required to update them. In the grand scheme of business building, very little of the hard work involves coming up with the idea. Most of the effort comes from working on all the key processes that go into the success of a business. Project management, marketing, product development, customer relationships, the ability to replicate your business, are just some of the areas that are intrinsic to running a profitable business.
Please don’t fall into the trap of thinking that a good idea naturally equates to a solid business foundation. Ideas are obviously the initial seed from which all successful businesses emerge, but they are not the only important ingredient involved in the business creation process. In the world-famous book “E-myth revisited”, Geber draws on the important distinction between creativity and innovation.
‘Creativity thinks of new things. Innovation makes new things’ Professor Levitt
Generating ideas is worthless without the knowledge and experience of how to implement them. Innovating is where most of the hard work begins.
The problem of selling your time
There is a big difference between working in your business and in your business. Many unsuccessful entrepreneurs make the mistake of spending a significant portion of their time working on their business rather than on it. Unfortunately, there are only a limited number of hours in the day available to the entrepreneur, so time must be spent building systems and strategies that are self-executing. Businesses that operate according to a set of rules based on objective evidence over time become self-sustaining and scalable. A scientific approach to business is recommended, because allowing subjective discretion to creep into the running of your business slows its growth.
“Discretion is the enemy of order, standardization and quality” Geber
When the entrepreneur adopts this objective mindset, building systems and strategies become the center of his focus, allowing for the replication and orchestration of a profitable business. Creating systems that add value to your business is the most productive way to invest your time
Many unsuccessful entrepreneurs make the mistake of trying to focus on too many things at once. Not being able to stick to one project at a time is where many budding entrepreneurs go wrong. I have been a victim of this many times. By spotting multiple business opportunities, you would foolishly try to take advantage of all of them. My mind was filled with ideas, strategies and plans to the point where everything became a big mess. In the end, my lack of focus resulted in me missing all these business opportunities. Make sure to focus on one business goal at a time. Make sure you achieve your first goal before moving on to the next.
“If you chase two rabbits they will both escape” -anon
Make unfounded assumptions
Some budding entrepreneurs forget that the business process must be scientific and rational. Many start-ups make unfounded assumptions about their future success, without objectively testing them. You may have a solid estimate of the success of a business idea, but unless you test your plans, you will never know for sure.
Never marry your opinion
Slogan forms to objectively evaluate all the structures you intend to implement in your business, no matter how small. If, for example, you plan to introduce customer service to your business, get feedback from a sample of your customers on the intervention before rolling it out on a larger scale. This will provide you with information to critically evaluate the potential effectiveness of your planned intervention. Assessing key processes within your business significantly reduces the risk of failure.
Be opportunistic and ignore processes
Many unsuccessful entrepreneurs make the mistake of worrying too much about the goal of making money. Obviously, making money is the main goal of all businesses, however, thinking about making money does not provide you with information on HOW to make money. Being consumed by this result will divert your attention from all the key actions and processes that must happen to create the desired result. Focusing on the outcome of having a successful business is not the same as knowing how to build a successful business.
The results are just by-products of a set of processes that precede it. If the processes are faulty, so will the result. Keep your focus glued to the key processes that form the backbone of building a successful business. If you can’t figure out these key processes within your business, find someone who can help you or really examine if this business is right for you.
“If you can’t describe what you’re doing as a process, then you don’t know what you’re doing” W. Edwards Deming.
Generally speaking, focusing on outcomes and processes can have parallels with opportunistic and systematic thinking styles.
The opportunist mindset relies on the rewards and riches that come from running a successful business and sacrifices valuable thought time to generate process-driven systems and strategies.
However, the strategist adopts a process-driven mindset that focuses on the mechanics and key actions that make a business successful. If the systems and strategies behind your business are effective, you will naturally get positive results.
Aim to be a strategist and not an opportunist.