Experience in business is the best teacher, but it pays to avoid the big mistakes of others, writes, Martin Zwilling.
I agree with those of you who tell me that you learn the most from your own mistakes, but that shouldn’t keep you from starting with some best practices, and the feedback from others who have been there and done that.
In my experience, mistakes in business are an expensive and painful way to learn, and in these days of rapid change, you just can’t afford the time to recover.
Thus, over the years of my mentoring and consulting efforts with entrepreneurs, I have a key list of practices that I recommend to everyone starting and growing a business. Even though many of these may seem intuitively obvious to most of you, I continue to see them overlooked by many, so I offer them for your consideration in staying a step ahead of peers with natural human tendencies:
1. Close the deal and cash the check before you spend it
Betting on funds you don’t yet have has crashed many businesses I know. Passion, over-confidence, and the pressures of business have caused many entrepreneurs to forget all the things that can go wrong at the last minute, and leave you exposed. Managing cash must always be your top priority.
2. Start business discussions only from a positive mindset
If you have had a bad day, or are in a negative state of mind, skip any tough negotiation sessions with partners and personnel discussions. Your negative emotions will be quickly sensed, and you will likely say the wrong thing for all concerned. Go home until your mind is rested and positive.
3. Always give yourself a buffer in promising results to others
With your passion to win business, it’s always tempting to commit to high-risk results in short timeframes. The last thing you need is a reputation for always being a day late and a dollar short. Business leadership and success must be built on trust, so never jeopardize your image.
4. Make sure you can deliver on every solution you sell
You may think it’s great that demand exceeds your supply chain, but customers only remember it as a loss of your credibility, and will tell others. Proactive customer communication should be your first recourse, followed by cost and service concessions. Don’t sell what you don’t have.
5. Hire the best, and provide necessary training and tools
Too many busy business leaders I know take shortcuts in hiring, looking for a quick fill, assuming new employees can learn on the job, with minimal training and old tools. The result is low productivity, mistakes, and poor customer experiences. Your business image will spiral downward.
6. Do your homework on new investors, partners, and vendors
There is no substitute for location visits, reference checks, and other due diligence before signing contracts. Don’t make gut decisions based primarily on marketing pitches and hard-sell tactics. Build personal relationships with key constituents, just as you do in your personal life.
7. Execute a balanced growth and implementation plan
Avoid death by success, where a fabulous large order from a big retailer exceeds your ability to staff up, deliver, or support it. Remember that the largest customers are often the slowest to pay, and the most likely to demand support and return concessions. Big growth takes big investment.
8. Use metrics on key deliverables to assure quality results
As your business grows, you won’t be able to manage every process personally, so you need help in quantifying results, productivity, and quality. I still see businesses that assume if everyone is working hard, all is well. Investigate industry standards, and take advantage of automated tools.
9. Establish an advisory board of experienced peers
The best business leaders I know are not shy about establishing business relationships with peers, both formally and informally. They are not afraid to ask for staffing pointers, direction, or even funding. Don’t let the pressure of day-to-day crises cause you to overlook strategic planning.
10. Formalize all business and partner agreements
The days are gone when a handshake and your memory were good enough. You need legal assistance, written contacts, and asset tracking processes to support company growth, people change, and new legal requirements. Start now to file and track changes in business commitments.
If you have already implemented all these best practices, I offer you my congratulations! If not, now is the time to start acting like the leader you want to be, and shift from startup mode to running a growing business in today’s environment.
There will still be plenty of challenges ahead, so apply your passion and energy to these, instead of recovering from known and avoidable mistakes.
This article was originally published on inc.com and is the copyright property of Mansueto Ventures LLC, which reserves all rights. Copyright © Mansueto Ventures LLC.
I am the Founder and CEO of Startup Professionals, a company that provides services to startup founders around the world. My background includes a 30-year track record as an executive in general management, computer software development, product management, and marketing. I’m now in “give-back mode” as a mentor to startup founders, and an Angel investor. My experience with investors includes roles on the selection committee of two local Angel groups, and working from the other side of the table with several VCs in Silicon Valley. In addition to blogging, I recently released my first book titled “Do You Have What It Takes To Be An Entrepreneur?” You can contact me directly at email@example.com