This advice is given by Steve Pavlina which is geared towards small business owners, particularly people who are just starting (or about to start) their own business.
1. Selling to the wrong people- While sales are important to the survival of any business, you don’t need to push your business on everyone you meet, including friends and family. Furthermore, it’s a waste of time to try selling to people who simply don’t need what you’re offering.
Selling to the wrong people includes trying to sell to everyone. Some customers are much easier to sell to than others.
Just because someone is interested in doing business with you doesn’t mean you should accept. Most relationships simply aren’t worth pursuing. Learn to say no to the weak opportunities so you have the capacity to say yes to the golden opportunities.
2. Spending too much money- Until you have a steady cash flow coming in, don’t spend your precious start-up cash unless it’s absolutely necessary. Your business should put cash into your pocket, so before you “invest” money into it, be clear on how you’re going to pull that cash back out again. Obviously some businesses require lots of cash to start, but in the age of the Internet business, you can very easily start a lucrative business for pocket change.
3. Spending too little money- It’s also a mistake to be too stingy with your cash. Don’t let frugality get in the way of efficiency. Take advantage of skilled contractors who can do certain tasks more efficiently than you can. Buy decent equipment when it’s clear you’ll get your money’s worth. You don’t have to overspend on fancy furniture, but get functional furniture that helps you be more productive. Don’t use an antiquated computer with outdated software that slows you down if you can afford something better.
It takes time to develop the wisdom to know when you’re being too tight or too loose with your cash, so if you’re just starting out, get a second opinion. Often the very thought of getting a second opinion makes the correct choice clear. If you can’t justify the expenditure to someone you respect, it’s probably a mistake. On the other hand, there are situations where it’s hard to justify not spending the cash.
4. Putting on a fake front- Many one-person businesses refer to themselves as “we.” That’s something a lot of new entrepreneurs do, but it isn’t necessary. There’s nothing wrong with a one-person business, especially today. It’s perfectly OK to refer to your business as an I when you’re the only one working in it. Pretending that you’re a we when you’re really an I is a bit silly. It’s not going to gain you any respect in a way that matters. Promoting yourself as an I may even be an advantage today, since people will know the buck stops with you, and if you make a promise, you’re the one who will carry it out. Promises from a we sometimes aren’t worth very much. If you’re so desperate for business that you need to lie, you shouldn’t be starting your own business. If you can’t provide real value and charge fairly for it, don’t play the game of business. Develop your skills a bit more first.
5. Assuming a signed contract will be honored- A signed contract is just a piece of paper. What’s behind a signed contract is a relationship. If the relationship goes sour, the contract won’t save you. The purpose of a contract is to clearly define everyone’s roles and commitments. But it’s the relationship, not the paper, that ultimately enforces those commitments. When I understood this, I focused more on relationships and worried less about what was on paper, and my business deals went much more smoothly. Once you start falling back on the paper, the deal is already in trouble. Creative (and lucrative) business deals almost always stray from the paper contracts that represent them. One of my attorneys, who had worked on dozens of game development deals, told me that no deal he worked on ever followed the contract exactly; most weren’t even close. And these were big money deals in many cases. Business relationships are similar to other personal relationships — they twist and turn all over the place.
6. Going against your intuition- Intuition is just as important in business as it is in other settings. While you might think that logic is the language of business, that’s far from reality. If you base all your business deals on hard logic and ignore your intuition, most likely you’ll be in for a world of hurt. We humans aren’t very logical to begin with. We simply don’t have enough data to make truly logical decisions because business deals depend on human beings, and we don’t have a logical system for accurately predicting human behavior. Not being able to predict how other humans will behave is a pretty big gap in our logic. And intuition has to fill that gap. The real performance of human beings is what makes or breaks business deals. But to assume everyone will perform as expected is unrealistic in the extreme. No deal ever goes perfectly. Intuition is a critical part of the decision-making process in business. Since business deals depend on relationships, you need to get a read on the other people involved in any deal you consider. If you get a bad read, walk away. If you get a good read, proceed with caution.
7. Being too formal- Business is built on relationships. In some settings a certain degree of formality is appropriate, but in most business situations being too formal only gets in the way. Business relationships work best when there’s a decent human-to-human connection behind them. It saves time and opens the door to a real human relationship. Human beings don’t want to build relationships with faceless corporations. They only want relationships with other human beings… sometimes animals too I suppose.
Treat your business relationships like friendships (or potential friendships). Formality puts up walls, and walls don’t foster good business relationships. No one is loyal to a wall… except the one in China.
Formality is boring and tedious. People want to enjoy their work. But if someone demonstrates they have a real personality and a good sense of humor, a connection is far more likely.
8. Sacrificing your personality quirks- It’s perfectly OK to be your own weird self and to inject your own unique spirit into your business, especially if you’re in your teens or 20s. Don’t pretend to be something you’re not. Ultimately you’ll enjoy your work much more if you attract the kinds of customers and partners that want to work with you for who you are — warts and all. Send the people who only want to work with androids to your corporate competitors. They deserve each other. If other people can’t handle your weirdness, too bad for them. Focus your energy on the people who can.
9. Failing to focus on value creation- It’s easy to fall into the trap of thinking that the purpose of a business is to make money. But the real purpose of a business is to create value. While it’s possible to make money in the short run without creating much value, in the long run it’s unsustainable. Even criminal organizations have to create value for someone. When you know your business is just sucking value away from others without providing anything in return, it will erode your self-esteem, and the business won’t be much fun to run.
Why does your business exist? It exists to provide some sort of value, both for you and your customers. The better you understand what value you’re trying to provide, the better you’ll be able to focus. Too often business owners aren’t clear on what value they’re trying to provide. They just sell stuff and hope for the best. That’s a lousy business model. The world doesn’t need more selling or more stuff. But it always needs and wants genuine value creation, and that’s where you should direct your efforts.
10. Failing to optimize- Although value creation is essential to a sustainable business, it’s equally naive to assume you can simply focus on creating value, and the rest will take care of itself. You may build a business that provides good value but loses money. As a business owner, you need to find a way to deliver your value in a cost effective manner. Most likely your first attempt will be very suboptimal. You’ll waste too much time, money, and resources trying to produce and deliver your value. That’s OK though. Many businesses start out that way. Just don’t let yours stay that way.
Once you have a particular business process in place, pull it apart and re-optimize it from time to time. Look for ways to make it more efficient. Can you get it done in less time? At less cost? Can you do it less frequently? Can you outsource it? Can you dump the process altogether?
It takes significant effort to build a successful business, but it’s also a tremendous growth experience. I know many people who have quit their jobs to run their own businesses. Many of them didn’t do as well as they’d hoped, but I don’t know any that regretted taking the plunge. There’s simply no substitute for holding the reins of your own destiny.
Regards,
Prazact Team.
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Nobody can go back and start a new beginning, but anyone can start today and make a new ending.
