“If you want to build a ship, don’t drum up the men to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea.” Thus speaketh Antoine de Saint-Exupéry, the famous French writer particularly known for his remarkable work, The Little Prince.
Being an entrepreneur is more about sharing your vision and your passion than organising schedules and manpower, in short, to portray yourself as a true leader. However, in many cases, the new business owners need to take the position of the head of the company without having any prior experience of working as CEOs. This creates a disconnect between best practices and behaviours.
As fresh patterns emerge with those new to being their own boss, experts feel that there are errors in it. Here are some of the oft-made mistakes that industry leaders ascribe to first-time entrepreneurs.
Buying for Best Talents Instead of Nurturing Them
Every business owner dreams of engaging the best minds in the industry in their organisation. However, the problem lies in the fact that best resources also enjoy the best pay-packages, which new businesses are unable to offer.
Lacking in the leadership experience which teaches one to manage human resource with strong core skills, the new CEOs fail to appreciate and support the requirements of the best minds. With their hefty pay cheques, these employees turn out to be expensive, creating a situation of loss rather than growth or expansion.
The better way is to gain the knowledge of how to foster such potential skilled resources rather than buy them.
“Once I was looking for professional photographers for a very significant event held by my company. We soon found that the high profile shutterbugs demanded loads of money. To save the huge expenditure I searched for the amateurs with an eye for design but without much business experience. Even though they had not commercialised their skills, they were brilliant at their job. This allowed me to get unbelievable work at a much less expense,” recounted Lab Gupta, Founder Fun Toys and Fun Clean.
Falling Victim to Trends
Blindly following competitors is a mistake most of the new businesses make across industries. The belief is ‘when it has worked for them it will work for me too’. What they fail to see is following the competitors makes the clients brand them as copycats rather than someone with an exclusive identity and purpose.
“Avoid falling victim to trends. Stay true to your message, mission and create techniques to draw the attention of others towards it. Businesses need time and patience to create their appeal amongst the customers. Many big businesses first started as a niche product or service which gradually advanced to a simpler and widely accepted unit,” notified Dr. Bala V Balachandran, Founder, Dean and Chairman, Great Lakes Institute of Management.
Failing to Develop a Comprehensive Revenue Model
Everyone who is in business wants to make a profit. Most also know about the product or service which they are selling and it’s making cost. What often, gets ignored is creating a revenue model which is much more important than learning to do a transaction. The lifetime worth of a client has to be made clear in the mind, so does a sketch on capturing that worth over time.
“It is a very common misconception that an entrepreneur needs to find new customers once a buyer buys their products. In its place, one should deeply work on the ways to optimize and extend the relationship with the existing clientele. This helps in faster growth,” suggested Biswanath Bhattacharya President Federation of Small and Medium Industries (FOSMI).
The secret of writing a fine revenue model is similar to that of drafting a business plan. All one needs is to foretell all the products in the next decade and make the patron’s journey easy in dealing with your company. The model can alter with time, but the map and direction remain same.
Ego and arrogance of the top management of a company have brought the doom of more businesses than any other factor. When many big corporates have collapsed because of these two vices, it is very important for the leaders of fledgling ones to try hard and avoid indulging in them.
“One of the best qualities of good leaders and managers is to admit their faults and flaws and try to make up for the damage done. Killing the ego is the first step in doing so,” prescribed Kuldip Maity, Founder, Village Finance.
Let these four warnings keep you from making the same mistakes most first-time entrepreneurs make. Invest the time to grow your business and plan for the future the right way.