After 10 years of being an entrepreneur, you probably think that I have everything figured out, right? Sadly, I don’t! Don’t get me wrong, to a large extent I know what I am doing, but just like my first day as an entrepreneur I am still making mistakes.
The mistakes aren’t the same rookie ones I have made before, but instead they are bigger mistakes. Here are some of the mistakes I have made over the last few years that you should avoid:
Business mistake #1: Don’t get too personal with your employees
I love helping my employees out. When they are happy, it makes me happy. But over time what you’ll realize is that the closer you get with your employees, the more likely they’ll push their problems onto you.
I don’t mind helping people out with their problems, but if they can’t learn to solve them by themselves, how will they ever grow as individuals? So instead of babying people 24/7 make sure you help them out a bit, but don’t be afraid to watch them fall. When they fall, they learn how to pick themselves back up, and hopefully prevent it from happening again.
Business mistake #2: Don’t be too generous
I have a tendency to be a bit too generous with co-workers. When you give them everything they ask for, they show gratitude. But often times that quickly fades, and they start expecting things from you.
You have to work hard to earn your money, your employees should too. If someone wants a new desk, don’t just give it to them, ask them why they deserve the desk.
You’ll be surprised as to what you can get your employees to do by making them earn the things they want. The best part about this, is that it will give them a sense of accomplishment.
Business mistake #3: Good talent costs a pretty penny
I used to be a big believer in hiring low wage employees and training them to get whatever work I needed done. The problem with this is that you’ll spend the majority of your time micromanaging people instead of focusing on growing your business.
These days I am a big believer in hiring people who are smarter than I am, and compensating them very well so that they’ll never leave. When you are a new businessperson this may be a bit tough, but with a good stock option plan you should be able to get around this.
If you hire smart employees not only will they do a good job, but you won’t have to train or micromanage them as much. Plus they’ll stick with you for a very long time if you treat them right.
Business mistake #4: Never stop networking
I have a really big network. Big enough where I can make 6 figure deals with companies without doing much work. The problem is, I’ve gotten too comfortable over the years, which is why I’ve haven’t been networking as much.
You don’t have to network 24/7 to build a strong network, but you should never stop networking as there are always up and coming people that you should know. If I kept on speaking at conferences, blogged more often, and went to local business events, I would be a lot further than I am now.
Networking has always paid off for me. Keep in mind networking only takes 3 to 12 months before it pays off. If I could turn back time, I wish I would have networked a lot more over the last 3 years as it would have caused my business to be a lot bigger than it currently is.
Business mistake #5: Be loud but not too loud
I’m young and as some young people tend to do, they don’t care what others think. I always felt like I was on cloud 9 and for the longest time I would say whatever I would want.
Although being upfront and blunt with people has helped me build a strong personal brand, it has also lost me a few 7 figure deals. Over time I have learned when to open my mouth and when to keep it shut. But when my older friends warned me about this a few years ago I ignored them, when I shouldn’t have.
Don’t make the same mistake I did and watch what you say around others. Some times giving advice when people don’t want it or cursing can tarnish your image.
Business mistake #6: Cash is king
Your business will have it’s up and its down. Sometimes things are great and sometimes you’ll lose a business deal. People will quit on you, and you may even go through a lawsuit or two.
Always be prepared for the bad times, and conserve your cash. Make sure you always think twice about spending your money…even when times are good.
It’s hard to predict when things are going to go south, which is why it’s always good to have cash in your bank account.
Over the years I have made mistakes. When times are good you blow money on fancy office furniture or you take a higher salary when you don’t really need the money. Always conserve capital, because things will eventually slow down.
Business mistake #7: Press is power
I’ve been a big believer that revenue and profit is all that matters in business. The problem is, other people don’t. When it comes to mergers and acquisitions and fund raising, you’ll be surprised how much press can help.
If the big blogs, newspapers, and magazines think your company is the next hottest thing, it’s going to be that much easier to raise venture capital, sell your company, or even close business deals.
My business partner and I hate getting press for no reason. Many of our competitors get press for the smallest things. It has worked well for them and if I could, I would turn back the clock and try to get at least one big press piece written on my company each month.
Don’t take press for granted! Get as much of it as you can.
Conclusion
Just like every other entrepreneur out there, I make mistakes. There is nothing wrong with making them as long as you learn from them.
Don’t be afraid to fall, just get up and prevent it from happening again. All entrepreneurs make mistakes, but what separates the great ones from the pack, is that they learn from their mistakes.
What other mistakes do you think entrepreneurs should avoid?
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Hey Neil,
Thanks for the tips. I loved the “don’t be too generous”. That was my problem since I was a kid until 6 months ago. Used to help everyone with anything they would ask for. That landed me to a spot where I was just “counted in” for something and taken for granted.
Definitely, you have to pick and choose wisely. Some people take opportunities for granted.
how would your theory work in a not for profit organisation when one inherits the team?
It is good to help people, but usually people that are helped get used to it and always expect to get helped without doing anything. The best thing to do is to make them earn the thing they need so they would not get lazy and always expect something.
I think you should do a post dedicated to mistakes Indians make vs. white people make…we would never give up our lands so easily but when we try to cook naan its sucks, why is that?
LOL… cooking naan is actually pretty hard. Restaruants cook it in a barrel…
http://www.visualphotos.com/photo/1×8730229/naan_bread_cooking_in_tandoori_oven_685465.jpg
Thanks for helping out AJ!
Hahaha. Naan is a fine dining, taking land is cake
Taking land is cake! Lol!!!
Great article! I always love reading your posts! I wrote an article on why startups fail recently over here (http://www.richardcastera.com/blog/why-do-some-startups-fail). You pointed out some good tips! Thanks!
Thanks, I’ll have to check it out.
Dam right about getting people around you that are better than you, if you can build a team of individuals all better than in you in various aspects, you are truly building your ultimate business dream team, which can handle any task, any obstacle ,and really take your business to a new level.
Yes! Everyone wants that dream team. It’s essential to find the right chemistry.
When you are building your team you have to carefully choose the people that you want around you because at some point you will need them to give you some advice and they have to be qualified people to be able to do that.
Neil, how about not keeping unproductive employees around for too long. Also, how about opting btw Revenue and Profit.
How about it haha! Thanks for the suggestions..
Neil, do you have anything on that topic: “opting btw Revenue and Profit”?
I don’t think I do, but if I do I will retweet the blog post.
Hey Neil,
Good point on not being too generous, it’s cool that you make employees works for what they want (while still giving them everything they ask for).
One quick question. I want to sell something, any product or service. I have less than $1000 and want to get started today. What do I sell?
I can’t answer that question for you. Only you can…
Focus on ROI, and sell anything that you think could earn profit…..almost anything ……
Go ahead…..
Nobody can answer this question besides you. If you have some money and you have an idea put it in practice. If you feel they you need somebody to help you with your idea look for a partner.
great tips Neil! let’s get you some cleaner stock images..it’s out of focus!
Thanks, glad you enjoyed the tips.
The biggest mistake I have seen in the past year (admittedly, it is NOT unique to 2010) is that people wait on outside help to starting their businesses. Anyone who has tried to raise money can tell you that it is much easier to raise when you have momentum with a project than when you only have a blueprint and some high hopes
Definitely, momentum is a key indicator many investors look at when considering an investment.
You need to evaluate whether or not your business ideas solve a real problem or addresses a real customer need.
Hello Neil,
You again rocking with these awesome 7 tips for good business.
What’s about point number 6?
I think points 6 and 7 are both very important.
Hi Mr. Neil,
I agree with you on almost all the above points but am confused on “Business mistake #6: Cash is kingâ€. As a matter of fact, we had a debate over this issue, yesterday.
My point
I believe the money spend on your high profile office interiors, technology and on your wheels is directly proportional with the growth of your business. Expensive office, luxury cars and of course your talent, ability and thinking capacity are most vital for accelerating business at a greater speed.
So I prefer spending more on these items.
Her point
She (my friend) always prefers to conserve as much money as it could be in bank. She believes one should spend least on office, cars and should always save money for future investments and growth.
On this point, we had a great debate, reaching nowhere….
Mr. Neil, what’s your verdict on this?
Honestly, it’s all based on personal preference. Different folks different strokes. I tend to save.
Neil’s point was about conserving money for lean times. If you’re sinking money into office leases and expensive cars, how are you going to have the working capital needed to run your business when your business revenue drops?
Mr Singh, I’m not sure I understand how “Expensive office[s and], luxury cars” “are most vital for accelerating business at a greater speed”? – can you clarify?
They can pontentially, it’s just all a matter of how you position your wealth…and your clientele.
You make some solid points here. I have always been a loud person myself and an old boss and friend once told me God gave you two ears to listen and one mouth, so you should listen 2x as much as you talk. That has been a hard one to follow but a necessary one.
The other point is to hire people who know more, this is good, I have been stuck in a cycle of training people who are sub par and don’t measure up. We have since started in a diff. route to try and correct the issue of training too much.
I learned the same lessons early on. Looks like you are on the right path!
Spending every waking second of the day hustling for your start-up. After a while, if you have a family or want a life, you will have to say to yourself “STOP” However if you are single, you can afford to hustle a little more than me but taking “me” time is always a must!
It can make you go nuts, You have to make sure to make time for yourself so you don’t burn out
Both great points. I have the same philosophy.
Hi Neil,
Thanks for this post, you have made so much sense to me. I have just started a creative services company, and I have already found myself struggling with being too generous (it’s in my nature). I want to help people as much as I can, and am trying to strike that balance where I don’t get taken advantage of.
Anyway, it’s nice to hear that you have gone through the same thing. Thank you for the helpful advice!
-Ali
It’s a learning lesson. You are bound to meet people who will exploit your hard work and good deeds. Plan ahead so you are untouchable
Dear Neil,
I feel you would write a great post on how to interview potential employees to select only the players ?? Please try it once if you make some spare time, you will write awesome stuff on it.
Thanks very much for the above post.
Keep writing.
I’ll try to write something on that topic. Thanks for reading
Good advice! You are welcome.
While I do pretty good with most aspects that you mentioned here, social networking is my weak part, I would say social networking is the most neglected thing in my business arsenal, I was always thinking about it as waste of time, if I need somebody I will try to reach them directly. Maybe it is time to rethink my principles.
You definitely should. Networking is the best way to meet great people and enlarge your client base.
Anything easy is not valued enough, whether its advice or gifts!
Very true!
Thanks for the wonderful tips, my major issue is not promoting myself as much as I should. I have a large network of contacts and I can talk lol, ( little miss chatter box)
But when it comes to promoting myself nope not great at it. How do you promote your passion/art and who I am?
I have a FB page but I do not post images of people or clients pictures. It’s not that I don’t have confidence in my work it is their privacy that I protect. Please advise! Thanks ~ Paula
First suggestion: go to networking events. Find out where your niche community congregates.
Thanks Neil, I am just starting out as business owner.
I enjoy your newsletters & advice.
Thanks, really appreciate it.
Great Insights!
Thank you for sharing. My company is a start-up and this is going to help me throughout.
Great, glad I could help
Love them all!! Keep the good advice coming please.
Thanks, much appreciated. Will do!
Very food advice, all points were good,
one question?
if you have a partners in your business, what kind of mistakes u find u do and how will you sort them ?
Compromise. It’s really give and take with partners.
Great post once again Neil.
You always are on the edge of thinking outside the box and very clever. Thanks for this great share.
Thanks, really appreciate the kind words.
As you said sir “Some times giving advice when people don’t want it or cursing can tarnish your image”, I have been noticing this thing from few years but most of the time i can’t stop myself by doing same.
After reading this article i m still confused whether i will stop over or not. But thanks for sharing your thoughts
I think it’s hard. You have to really make a conscious decision to stop.
I have been getting too close to my employees by listening to their griefs and i’ve always been trying hard to help them out. I think I’ve been too generous and now there’s a lot of abuse. I’m unable to sanction anyone fearing they might feel hurt and consequently quit.
Your views Neil
You are in a very tough spot. I would suggest you distance yourself from their personal issues as it may affect your business sense.
You must do your market research before very carefully and deep, so you don’t miss anything who can coast you both time and money.
Definitely, market research is a must!
Great tips. It is a huge eye-opener.
Glad you thought so
Hi Neil,
great tips & reminders for these 7 pointers. As well as not getting too close & being too generous to employees, I think a business owner should not get to close or generous to the customer. Expectations of one another (the dynamics) change & usually to the detriment of both parties.
Getting too close make saying No much harder for both sides.
Definitely, it’s hard to disassociate from your employees once you have gotten to close, but its necessary for long term business success.
hy…neil
it was very useful tips……
Glad you enjoyed them, thanks
Great stuff. something new to your other mistakes you mentioned in the pdf
Glad you enjoyed it, thanks!
Hi,
Before you start: be realistic(!!!), research the market really good and keep your promises!
At business world: professionalism and respect!
This points are missed and make your own fail.
I did make it short
Good job Neil, thanks
Jelena
These points are many times missed and make your own fail.*
Definitely, love those points. Thanks, Jelena
I have now read this article several times the last days, it’s very fascinating, I learn new things every time, a very good article.
Glad you found it useful, cheers!
I really like that you actually care about your employees and want to see them happy. There are lots of employers who don’t seem to care, and take for granted what employees do for them. This is great advice, as sometimes some employers may be too generous and kind-hearted and need to be more firm.
Definitely, there is a point where business is business.
The last point was really good. I do notice that people less talented than me get more press attention for meaningless things. The question is how do you get the right press attention especially if you are a beginner ?
Definitely, it truly is quality over quantity.
Thanks, for the great tips
Thanks, glad you found the post useful
I actually own an online business so ican avoid a few of those personal conflicts. But you are right can never be to careful.
Definitely, always be mindful.
I’ll def try this!
Awesome, let me know how it works out!
Hey Neil. Great article.
When you talk about press, how do you get their attention? I mean if we are a very small business, do we have a chance of getting their attention?
Definitely, You just have to get out there and make yourself seen!
Hi neil, thanks for these insights, it’s very much helpful specially for starters like us. My favorite is Business Mistake #5. Be loud but not too loud. I believe that not all people wanna hear your story, some are only nosy. And as the saying goes, less talk less mistake. I would like to add one tip, I have learned this from one of my seminars. “Don’t stop sharpening the saw” Meaning, don’t just stop there, keep on moving, keep on innovating and always keep on learning. Hope to hear more from you, keep it up!
Thanks for the tips, they are great. Will do
After i read your post for growing network some weeks back, i found some awesome clients for me, and Neil must say you always use the beneficial words for me and all as well, like this post love it
Thanks, glad I could help!
Business is always a penny i like the post which you have explained with great points
Definitely. Great point!
Thanks Neil
This is what I meant in one of my earlier comments about detachment from basic human traits :p Business requires a very careful balance between friendship and detachment to the extent of both parties being able to benefit one another but not weighing each other down either. It’s sad, but everything comes at a price. And at the end of the day, all of these precautions are necessary only because human nature cannot be trusted to act out because we already know what that will lead to…
I can definitely see how both comments tie in now, brilliant points.
A business is different from a friendship. In business you can loose all your money if you are doing something wrong. This is why you can’t maintain in a business the same relations you maintain in your daily life.
Great article, thanks
really like “Don’t be to generous” and cash is king.
Thanks, glad you enjoyed it
This article really helps keep businesses on track. It’s important to be aware of the pitfalls that most businesses and entrepreneurs make. At LookupPage (www.lookuppage.com), we put a special emphasis on reputation management — or as you called it working with the press. In some ways, there is nothing more important that having a good reputation — this can make or break your business. For more tips about reputation management, you can look at our online blog. Thanks so much!
good tips. thanks for sharing these. Now I know what not to do.
Glad I could help
Good talent costs a pretty penny… this what it should be. Find best people to join your team and make them contribute knowledge rather than train people and they’ll leave after they learned from you.
Definitely, thanks for the insights.
i totally agree with you this are the golden tips that a business man had to remember for getting success in businiess.
Awesome, glad you agree
I use to get guidance from my parents and senior person in my business field to avoid mistakes
In business mistakes will happen but we should rectify and clear it
Definitely, always learn from your mistakes!
Cash is King. The cash flow is one of the most important things for any company. As a matter of fact in my country there are many profitable companies that close beacause they don’t have a sufficient cashflow to manage all of they everyday operations.
That is definitely a major component in growth, I agree. Thanks for reading
Thanks for sharing some of your mistakes Neil. It always helps to know that I’m not the only one who goofs up. I agree with you that you should learn from your mistakes. You can gain insight that you may not have gotten if you didn’t make the mistake in the first place!
The path to success is paved in failure.
Having business with good customers will help us to lead a good business
Cash is the King!!
really Neil, saved money the only thing that will help you to make through bad times.
Hi Neil!
Awesome Post! Thanks for enumerating the Business Mistakes that entrepreneur should be avoiding. Mistake is a part of success. And we will never gain success without failing at some point of our lives. However, we should learn something from that mistake to avoid it from happening again.
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I love you site
Thanks for the tips. I am employed so really don’t have the idea of the do and don’t. But I can see the trend that people usually pass down their business to their next generation, instead of business partner or employee who are more capable.
Yep.
Most people feel they can trust family more so then outsiders. Which in some cases works and in others does not. Just because you have the job doesn’t necessarily mean you should.
In the recession, it’s particularly hard increasing your costs by hiring the very best people, but it is sound advice.
I’m can definitely agree with networking. The most successful entrepreneurs and business people are thinking about the 2nd and 3rd interaction when they meet someone. Networking is about building relationships and thinking long-term. Thinking long-term helps you in business and financial ventures.
#2 – Give them just enough praise so that they know that they’re doing a good job but not a huge amount, that way they feel like they still have to prove themselves.
I never stop being surprise with the quality of your posts and how you keep having time to be so generous and share so much of your knowledge and experience. I have to say that for me the hardest points to accomplish are “not being to personal with my employes” and “not being so generous”. When you are a sailor of a first trip it is really hard to know how to follow these golden rules.
hey neil,
thank you so much for informing us with these mistakes. i used to be too personal with my employees. now i will definitely follow your instructions.
Thanks.
Matt
Hi Neil Patel,
I read your article, it is a good effort, but i am not totally agree with that you are saying that employer should not much free with employees. but here is another which i have read from http://www.blogoftheworld.com/business/item/177-think-the-top-hit-the-top-business-ideas.html in which this man said to encourage the employees, and it should not be done without be free with employees.
great tips Neil! let’s get you some cleaner stock images..it’s out of focus!Thanks!,,,,,,,,,,,,,
LOL!! Yeah, those tips are pretty basic but indeed they stand for all different types of businesses!!
Definitely, great point. Thanks for reading