Starting a business is one of the best ways to invest in yourself and your future.
As the new world of work changes, and the idea that spending years investing in someone else’s business is fading, being self-employed has limitless possibilities.
But with those massive opportunities comes big pitfalls. If you want to give your small business the best chance of success, it’s important to understand what the most common mistakes are, and how to avoid them.
1. Superhero Syndrome
Most business owners mistakenly believe they can do everything on their own. They do everything from answering the phone, to replying to emails, to handling clients and sealing new deals.
But this mindset is a huge mistake, and leads to Superhero Syndrome. There’s a fine line between doing everything on your own, and hiring a professional or other expert to advise you on what’s best. As a fellow control freak, I can relate to this diagnosis.
Although tackling each project on your own is a good way to learn the ins-and-outs of your business, in the end all you’re doing is crippling your progress, your productivity and ultimately the success of your business. You physically can’t do everything on your own — you’ll eventually burn out. The sooner you realize you don’t have to be the superhero business owner, the better.
The Solution: Learn to delegate more work to team members, or hire contractors to take the load off your plate. Many times you’ll find someone who’s more efficient and better-skilled at a certain task than you could ever be.
2. Undervaluing Time vs Money
As long as there’s a tutorial out there, in-depth resource available, business owners are ready to tackle it themselves. But that’s not always the smartest solution. It’s a mistake to spend more time learning (and failing) to do a certain task, than paying someone else a few dollars. Do you know what your time is worth, moneywise?
Financial expert Farnoosh Torabi explains that the formula for calculating your hourly worth is as follows: Take your yearly salary and remove three zeros, then divide that figure in half. For example; if you make $100,000 a year, subtract three zeros, which is 100 and then divide in half, which equals 50. In this example $50 would be your hourly rate.
If you can hire someone to complete a project — whether it’s business or personal — for less than this amount, it’s a smart investment. Your time is better spent making $50 an hour than trying to learn a skill that you could pay someone $20 to do for you.
The Solution: Calculate your own hourly rate using the formula above and evaluate each task in your business. Are you better off doing it yourself or outsourcing it to another contractor?
3. Meshing Personal With Business
Whether you’re self-employed or run an LLC, your business is an entity all on it’s own — and should be treated as such. This can be hard when you run a business out of your home office. The personal and professional boundaries are difficult to locate and enforce, but overcoming this pitfall is essential to staying sane.
This lesson is something I learned during my first year of being self-employed. I noticed that the less I prioritized my own self-care, the more my business suffered. I was less productive, distracted and felt guilty for not getting what I needed done.
I recently overcame this by separating all my financial and business accounts, and having a heart-to-heart with my family. Once I explained that having a private office space, and alone time, was vital to making a living, they completely understood and were happy to accommodate.
The Solution: The first step towards separating your personal and business time, is to physically divide them. You can start by opening separate business checking accounts, email accounts and even a new office space. The next step requires you to become open and honest with your family. Make sure they know that between X hours of the day, you will be busy with work and aren’t to be disturbed.
4. Employing Family or Friends
As much as I’d like to be able to depend on my husband for a last-minute business crunch, or hire my sister to be my business partner, I never seem to make that work. After multiple failed attempts, I’ve come to the conclusion that (for my business) it’s not a smart move to employ friends or family members.
They have their own lives, businesses and priorities. And since that personal connection is already set up, it’s difficult to get past to establish a business partnership. If you’ve tried it and it worked, then by all means continue. But for the most part hiring a friend or family to work for you, will likely lead to both a headache and heartache.
The Solution: You can still be a friendly boss or partner without hiring someone you know personally. A colleague or business associate is a much better candidate for a successful working relationship. And you won’t have any emotional hangups about treating it like one.
5. Avoiding the Right Tools
Thanks to technology, we have more digital tools and programs available to us than ever before. So if you’re not using them to your advantage, well, you’re doing yourself an injustice.
Yes, there will always be security issues with linking certain information or accessing accounts online. But even before there was the internet, there were security problems with having physical papers lying around.
Don’t be afraid to use the right tools, and to experiment with new ones on a regular basis. There are better and more simplified versions coming out everyday, and if your business is to keep up, you have to be open to trying new things. Experimenting is an important process for any business to grow and discover new ideas. For example, this eBook on marketing proposals explains how to formulate a winning proposal. But without the right tools, you’ll still be behind the curve.
The Solution: Be open to trying new products and services. Take advantage of 30-day free trials or beta testing periods to see if a certain tools makes your business run better. You can always cancel it before the 30 days are up and there’s no harm done. Either way you will have discovered a better method, or at least learned what you don’t like.
There’s nothing wrong with making mistakes in your business, and in fact, that’s one of the best ways to learn and improve. But the essential factor to success becomes tingent upon how you handle the failure.
Don’t worry if you’ve fallen into one (or all) of these pitfalls in the past. All you have to do is take action on the solutions provided and your business will have a leg-up on the competition.
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