If you are a business owner who has made one or more financial mistakes don’t beat yourself up! It is easy to do–especially in the early years of doing business. Here at The Centr we are always looking to better ourselves and help our fellow entrepreneurs. So we have made a list of 9 insights that we have learned from some of the mistakes we have made and things we have observed. When applied these 9 things can help you avoid some financial pitfalls in business!
- Spend less on learning curves in the foundation and growth phase of business. There is some debate on how many phases of business growth there are but we believe that there are three phases of business; foundation, growth and momentum. The foundation phase is when the business is being established. The growth phase is when the business is experiencing widespread growth and the momentum phase is when the business is pressing forward with a good rhythm. When hiring in the foundation and growth phase it can be tempting to hire the less experienced person at the lower pay rate with the thought that you will save money and they can be trained. However, trying to teach people how to do the job you hired them for tends to stunt growth and put a halt to forward movement. So in the first two phases of business, especially for key roles, it is wise to spend a little more to hire the person who already has the knowledge to do the task.
- Be willing to spend money to leverage your time. If you can spend money to leverage your time that is how you are going to get further faster. Don’t be afraid to make the investment in freeing up your time so that you can build wealth. Outsourcing is an excellent way to leverage time as it can enable your business to accomplish more in less time.
- Beware of “shiny object syndrome” and giving your services away for free. As a business owner people will come to you with great ideas in hopes that you will cut them a deal or give them products or services for free. Though it can seem like a tempting investment opportunity it more often than not leads to loss. There are certainly occasions where you can follow your gut and do a trade off but be careful when presented with these opportunities as they can be a drain on your resources.
- Don’t keep unproductive employees too long. It is easy to get in the trap of keeping an unproductive employee too long. You may be afraid of offending people or hurting their feelings. But they are going to sink the ship if they aren’t producing. It doesn’t serve you, your team OR the unproductive employee to keep them. Obviously, you want to give them warnings, try to coach them and do what you can to give them a chance to improve. But ultimately if they do not change their ways they need to be let go. You aren’t doing them any favors by letting them get away with underperforming.
- Be realistic about the numbers. As a business owner sometimes you have to approach decisions and take a step of faith without knowing where the finances will come from. But it is a dangerous place to remain. It can lead to being afraid of looking at the numbers because of the dread of knowing that they are bad. But you have to be willing to be realistic and know where you are at. You can and should operate in faith but it shouldn’t be paired with denial.
- Take ownership of finding your first 10 customers. In the foundation phase of business there is a lot that is going on that can be overwhelming to a business owner. But there is value in being the person who gets your first 10 customers. One reason is that it lets you know if your business is viable but also it lets you know what it takes to make the sale. This helps you spot gaps and dial it in so that when you hand over the sales process to another person or team you are able to provide value to them.
- Don’t hire too soon. It can be tempting to bring in too many people too soon. Who wouldn’t want to get everything all prepped in anticipation of growth BUT this can cause a lot of wasted time and money. This causes employees to wait for work vs. hiring employees when the work is already established. When there is a lot of bloat in your business this can also lead to a culture of idleness and when the work resumes and people are busy again some won’t be able to hack it. Think of all that money wasted on payroll for an employee that you can’t keep! Outsourcing is a great option here because it can allow you to scale up or down depending on your needs without the bloat.
- Be willing to step off the cliff if it feels right. YES we used the word “feels” in a business blog but we would argue you got into business because of “the feels.” You likely are where you are because you have trusted a few good gut feelings. You know your risk threshold. Trust your gut in ways that require faith and in ways that require restraint. You have to be willing to make decisions without knowing the outcome.
- Use the combo of your mind, your gut and your heart to make decisions. Don’t discount the miracles that can happen when you bring spirituality into business. When we mention spirituality we aren’t necessarily referring to religious spirituality just simply the connection between your heart and your mind and the powerful results that you can achieve with a balance.