7 Door Closing Mistakes I’ve Watched Business Owners Repeatedly Make
(Good Businesses, Gone Bad)
From the time I was 16 years old, I’ve had an up close and personal look at small businesses, from the inside out. Not only have I worked for them as well as helped others launch and grow, I’ve also watched a few crash and burn just as they appeared to be skyrocketing towards success.This is what I’ve learned.
I’ve seen friends and people I was close to start businesses of their own and have had the benefit of observing what they’ve done right and what they have not. What has helped a few of them succeed and what inevitably led to the failure of others. I have put together a list of the seven most common and easily avoidable mistakes I’ve seen them make, in an effort to help others avoid doing the same. Don’t listen to the messenger, just adhere the message.
1. Mistaking Ego For Entrepreneurship
I’ve come across many big egos in small business. Though the biggest and most toxic to the company almost always belonged to the owner or owners themselves — rarely would the problem stop there. It often becomes a cancer to the company, spreading like wildfire before a diagnosis is even made.
Ego and arrogance have a way of attracting and breeding more of the same. The most egotistical of my former employers had a tendency of putting individuals almost as arrogant as they were in leadership and middle management positions. Not realizing the biggest mouth in the room is often backed by the smallest mind. Good leadership starts up top obviously. Not just through an owner or founder’s words but through the examples they set through consistent action. As an employer, if you don’t care enough to show up on time — or better yet ten minutes early — why should anyone else?
If you want to start a business because you always wanted to be a boss — for the love of God and the rest of us, please don’t even bother. The last thing we as a society need is another business owner whose sole motivation for setting up their company was a popular song by rappers Rick Ross and Meek Mill.
Though ego plays a major role in the mistake below as well, I believe this one to be the most common and deadliest mistake made by small business owners. Curate your confidence and competence but kill your ego.
2. Letting Money Go To Their Heads
I’ve watched it happen time after time, to one small business owner after another. They start off hardworking, humble and hopeful. They treat employees more than fairly and genuinely appreciate their efforts and sacrifices. Then one day, a larger check than they’ve ever deposited makes its way into their business account and they begin to lose sight of who and what helped get them there. They believe their own hype and that it was solely their own doing. They forget about what’s important, not them but their company and the work they do as well as why they do it. No successful business owner ever started off with a vision of just money, there’s always a purpose to a successful venture. Your why shouldn’t include stacks of cash.
That’s not to say you shouldn’t make money. For the love of God make lots of it. Do right with it, invest it, donate it, put it back into the business. Just don’t let it make you feel superior to others, because you’re not — regardless of how much you have and how little they don’t. In fact, it could be said the reason they have so little of it is because they’re under compensated and their employer is overpaid. Which brings me to my next most noted mistake.
3. Undervaluing Others and Under Compensating Them For Their Time, Contributions and Efforts
To be so delusional as to believe you and you alone are responsible for your success as a small business owner is a fast track to failure.
I cannot stress enough how frustrating it is as an employee to feel unappreciated. To be paid less than you’re worth is demoralizing. It creates a toxic work environment over time. At best, your employees will always be on the lookout for a better opportunity. At worst, they’ll steal from you. They’ll look to take on side jobs and projects, out of necessity. You may even inadvertently create a competitor. One who paid close attention to what you did both right and wrong, who knows your strengths and weaknesses.
If you are worth $800 million, to pay those who work for you $8 an hour is a flat slap in the face, no matter how you cut or spin it. It just shouldn’t be.
Firstly, because it’s simply not a sustainable living wage. You can hardly call it pocket change. It doesn’t help our citizens progress, it helps our corporations thrive. Which does nothing but lessen us as a people. Undercut your employees pay for the sake of your bottom line and watch how quickly they grow to resent you for it. It also doesn’t hurt to say thanks once in awhile.
If you pay a minimum wage salary, you’ll always get a minimum wage mind frame, attitude and work ethic for it. To expect anything more is merely well wishing. Employees tend to not work above their pay grade, nor should they. What you pay out is what you should expect back. Which brings us to —
4. Forgetting or Failing to Treat Employees Like Human Beings
I know, this one seems basic and obvious. Of course you’d treat your employees like the humans they are. How could you possibly treat them as less? Well — quite simply actually. Take others for granted. Forget they have children and a family too and some days their kids wake up sick, unable to make it to school. Undercut your employees pay for the sake of your bottom line and watch how quickly they grow to resent you for it. Basically, treat your employees short of how you’d like to be treated. Live like royalty while they struggle to feed themselves. Ignore the fact they have a family, needs and personal lives — just like you and everyone else. Being the boss doesn’t give you a license to treat people like shit. Which is a nice sageway into another commonly made yet fatal mistake.
5. Failure To Communicate In A Clear and Healthy Fashion
You can be the absolute best at what you do but if you don’t know how to communicate in a professional and constructive manner, good look finding success as a business owner or startup founder. Nobody wants to show up to work and be yelled at on a daily basis. In fact, constantly yelling is one of the quickest ways to get people to stop showing up. It breeds bad blood and resentment. Even the people who continue to show up day after day eventually get sick of it and begin focusing on ways to sabotage or short the company out of spite.
Employees are not mind readers. If you want something done a certain way, that needs to be clearly expressed before hand. Assuming those under you know how you want something done — at least in the early stages of their tenure with you — is a great way to ensure it doesn’t get done correctly.
Communication is the key to any healthy relationship or venture.
5. Hiring Unqualified Friends and Family Members
To be abundantly clear, there is nothing wrong with hiring friends and family members. It’s a wonderful thing to be able to do actually, for both parties. I’ve worked alongside friends and family and I’m grateful for having done so.
However, just being a friend of yours or related to you doesn’t make someone qualified to do the job you’re paying them to do. Promoting them for such reasons is toxic and costly. You cannot make hires or business decisions based off of love or admiration. Sure, they may be great people, it doesn’t make them great employees. In fact, it can work against you if you let it.
I’ve often seen people go to work for a friend or family member and one of two things happen; either they forget their friend is their boss or forget their boss was ever a friend. Meaning they either weren’t able to compartmentalize their relationship and separate their friendship from their work — or the business relationship got in the way of the now former friendship. To say friendship and business never mix well is an exaggerated generalization. It can absolutely work, it really just depends on the individuals themselves.
6. Trying to Take a Step Back, Entirely Too Soon
Many entrepreneurs start businesses for more freedom and flexibility only to find out they’re now required to work more than when they worked for someone else. Some have grandiosely delusional visions of just sitting back and collecting checks while others sweat and labor strenuously. This is an absolute formula for disaster. It’s just not a feasible reality. Get to work.
While there is nothing wrong with having the goal of eventually being able to be less hands on in the day to day activities of the business and delegating your former roles in the company to competent and trustworthy hire’s or heirs — trying to pull the trigger too soon can be detrimental to success.
Taking a step back before those under you are ready to step up or before your presence and expertise isn’t needed as much leads to doors closing for good.
7. Not Holding Themselves Accountable
We’ve all had a boss who always found someone else to blame for even their own mistakes. Employers who could not so much as spell the word accountability. Gary Vaynerchuk has a wonderful philosophy of blaming himself for everything, so to speak. Not in a negative sense but instead in the most positive and progressive way possible. It’s a way of acknowledging that as a business owner and entrepreneur, he’s responsible for what happens.
If you are always deflecting blame and pointing fingers, you’ll never be successful. Accountability is imperative, both in business and life in general. One of the worst characteristics of a business owner is to think nothing is ever their fault, the exact opposite of Gary’s philosophy. So take responsibility, hold yourself accountable for everything that happens. You can blame whoever you want for what goes wrong but as Gary often states, the market doesn’t care. Not about your feelings, excuses or nonsense. Get accountable.
Learning from your mistakes is great but learning from the mistakes of other is even better. Failure is inevitable in life and you’re going to make mistakes but you don’t have to make the easily avoidable and irreversible costly ones I’ve watched those close to me repeatedly make. I’m not an expert, just a keen observer. I’m not a business owner, I’ve just worked closely alongside enough of them to have learned from them. From both their successes and failures.