Entrepreneurship is tough. There is no sugar coating it.
To be an entrepreneur requires a combination of creativity, problem-solving, management, leadership, sacrifice and hard work. It’s often painted as the holy grail of work-life ambition but starting up a business is a daunting and often unforgiving task. Spoiler alert, the stats are against you, you are likely to fail, but with the right approach, ideas and support structure you can make a real go at it. Hell, you may even turn the venture into a resounding success. Fact is that it won’t be a walk in the park, so the margin for error is so low.
Many of our country’s entrepreneurs go straight into the entrepreneur environment with little or no business management experience. Many also enter without significant amounts of corporate experience and are now expected to bootstrap a business and wear all those hats while keeping the costs as low as possible. While you scale your business it’s essential to meticulously plan your finances, hire smartly and adopt technologies and strategies that offer flexibility.
Certain mistakes are commonplace in the industry but can easily be avoided.
1. Not having a clear and concise strategy
Hope is unfortunately not a strategy, and sadly many entrepreneurs fail to strategise across all areas of their business. Do you know your expected market size based on industry and consumer stats? Have you worked out your expected cost per acquisition of client? Have you mapped out your growth strategies and taken into account the capacity of your team for such growth? As an entrepreneur, you strategise for the good times and you strategise for the bad times. By mapping out a clear multi-faceted plan you prepare yourself and your business for the ever-evolving landscape, ensuring that you are dynamic, less prone to turbulence, can adapt with diversification and scale effectively.
Know where you are going, and how you can get there. Underestimate your weaknesses and threats at your peril, and as proud and confident as you are, never overestimate your strengths and opportunities either. Contingency plan all along the way, and leave room for flexible scaling and pivoting, diversification opportunities. The most stable and successful startups are those that understand their environment, and constantly analyse it to stay ahead of the game.
2. Not understanding your finances.
One of the biggest oversights an entrepreneur can make is not having a firm grasp or understanding of their company financials. Even if you are employing or outsourcing an accountant or bookkeeper, it is essential that you understand the numbers and personally track your own company financials. It goes without saying that you should have knowledge of your business’s financial position at any given moment, but it is also essential to manage debtors, creditors and cashflow for the business. Cashflow is the killer of a small business and if you are bootstrapping the business, every cent matters.
Don’t have money to hire an accountant or bookkeeper? Don’t stress, many companies specialize in offering these solutions to SMEs and entrepreneurs and are cost effective. The BeanCounter, started by entrepreneur and Shark Tank celeb, Marnus Broodryk offers small businesses accounting support for as little as R4 000pm. Money well spent.
3. Scaling too quickly.
Ok so you have a product or service and you client list is growing. Revenue is good, and you begin to picture a scene of a global empire. You start to panic about capacity, thinking of all the deals in the pipeline and how you might not be able to fulfill them. The logical solution would be to hire more personnel, right? Wrong! Well it’s wrong without serious strategic planning, forecasting and some conservatism. Hiring in the hope or expectation is a gamble that can ruin a growing business, add unnecessary financial pressure and if severe enough cripple cash flow.
Is your team working at capacity? Can processes, procedures and division of tasks be improved for greater team efficiency? First answer these key questions before hiring. Even then, utilizing outsourced teams, freelancers and project managers on a client by client account is a smart way to scale up when necessary without taking on permanent staff contracts that you are stuck with in times of a lull in business.
UNBRANDED_ offers our clients an outsourced, flexible and experienced brand and marketing team, costing much less than an internal marketing department would be. There is less waste, less expense and more focus on ROI objectives. The same can be said for companies offering accounting, business development, office upkeep and management and even décor and styling (furniture rentals vs buying)
4. Neglecting Brand and Marketing.
A common theme when discussing entrepreneurial ventures is the notion that “if you build it, they will come”. Sadly, this could not be further from the truth. We spend each day being constantly bombarded with information. Products and services we don’t need, didn’t think we needed and admittedly sometimes that we actually could do with, are marketed directly to us, with companies trying to claim their piece of the proverbial pie.
Out of side, out of mind
It is easy for a product or service to get lost in this clutter, and then quickly forgotten. This out of sight, out of mind notion rings true almost 100% of the time. Organic ranking takes time and considerable understanding and investment in SEO (search engine optimization), while PPC strategies (using Google Adwords) can get you throwing your name in the hat to persuade interested searchers online. Social media gives many small businesses a voice and a platform to scale fast and cost-effectively. This could result in clients and sales growth, providing that once you have the attention of the potential client you inspire through your brand, messaging, content and product/service. These key principles are essential for client acquisition and very often, entrepreneurs tend to neglect this, going to market with less than desirable brand, communication and content. Once you have given a product or service a look and don’t feel it’s professional enough, do you ever go back? No. You don’t. Especially as there are other businesses out there willing to do things properly, inspiring your prospects and converting them into clients. The kicker… their product or service doesn’t even have to be better than yours, not even close, it just needs to be more visible.
5. Reluctance to adopt technology.
Technology is key in cost-effectively and sustainably scaling a business. Where we once had the need for full-time bookkeepers, we have accounting software that automates this. To an extent, where we had a need for traditional Operations and General Managers, we have project management software and sales software that coordinate teams and operations through a clever user interface and easy to operate, functional abilities that increase efficiency and streamline processes. The result? More can get done by fewer people and we are seeing the rise of hybrid tech-savvy employees, and nimble, digital-focused managers.
By disregarding technology, an entrepreneur spends a lot of the precious time he/she has, managing unnecessary admin, populating sales spreadsheets, manually processing reports and in turn, stagnating his or her own growth and as a knock-on effect, that of the company’s employees.
There are incredible companies out there building solutions for every facet of your business, and this software is available on subscription with varying plans based on what you need.
Pro Tip: Google, do your research thoroughly, read the reviews and study comparisons between competitive products. If there isn’t much out there on a platform, rather skip it, find something tried and tested that gives off a sense of reliability.
6. Thinking too emotionally.
All entrepreneurs are different, however, the very best and most successful often have a high level of EQ (emotional intelligence).
Having a high level of EQ, should not end with how you build connections and inspire those around you, it also needs to aid you in controlling your emotions when the time calls for it. Thinking too emotionally and letting it get the better of you is a recipe for disaster in an entrepreneurial world where we need to remember something very simple and very true, it’s not personal it’s just business. Say you lose a client, they aren’t happy with your service, your product or your team’s work. That is the nature of the game and getting defensive or emotional over negative feedback is a sure-fire way to let that seep into your organisation’s culture. You will make mistakes, you will let some people down, you are only human and the team around you are only human too. It’s how you deal with these situations that matter.
In a time of the social CEO, we need to remember that even though our PTY LTD separates us from our business as an entity, our words and sentiments, culture and values will bond us to it forever. An out of line tweet, emotional response or even a misplaced like on a controversial post carries sometimes severe consequences.
Set emotions aside in the entrepreneurial landscape, especially when they serve no purpose in adding value to your business.
Entrepreneurs play in a cut-throat, highly competitive world, with clientele that has never been more disloyal, due to their constant search for perfection. There is enough pressure without the need to self-sabotage by overburdening ourselves with unnecessary admin, manual processes, personnel and drama.
Need some direction? Here are some of the tools we use to streamline our business.
Project planning and management: www.milanote.com
Internal communication: www.slack.com
Accounting, payroll: www.sageonline.co.za
Video Calling platform: www.appearin.com
Images courtesy of the incredible: www.unsplash.com