When entrepreneurs hang out their shingle and open their doors for the first time, their heads are bursting with pressure. They are pulled in many directions and pushed by many factors. Self-employed though they may be, they find themselves answering to agencies, vendors, and customers.
Those first days can shape the business’s direction, and too many of the early decisions can launch bad business habits it will be hard to break. Considering how costly those habits can be, you want to stop them before they are entrenched or break them as soon as you can.
One of the best ways to learn how to succeed in starting your own business is to study what NOT to do. But, the best first step for entrepreneurs and new small business owners is to become good at self-assessment.
5 bad business habits to break now
- Insufficient Planning: Planning is not a one-time deal. You need a firm and formal plan for the business. But, it must have the flexibility to anticipate and respond to change.
Without a plan, you risk moving from half-finished project to another. Without a plan, events distract you from your objectives. Without a plan, you have no budget or infrastructure.
You should hold a monthly meeting (with just yourself if necessary) to revisit the plan in terms of what’s happening. Budgets, for example, always have an “estimated” and “actual.” You should adjust your budget to keep close the gap between the two.
Likewise, you should look at all aspects of your plan for performance, quality, customer satisfaction, and so on. Wherever the expectation and outcomes are not aligned, you must respond with a plan adjustment to correct the misalignment.
- Failure to watch the money: Too many small business owners know too little about financials. They too often just don’t understand how much revenues differ from profits. You cannot leave your business future to the latest QuickBooks download.
With all you must do, you will not keep up with accounting computations, tax laws, and layers of expenses. Your time is too important. You must build markets, serve customers, manage employees, and much more.
From the start, you need an accountant. You can hire an outside accountant for less than you would pay yourself for the hours spent with numbers that you may not really understand. Then, you have someone to check your business performance with a different pair of eyes.
- Working without a net. Security has become the biggest contemporary business issue. Small businesses go under for lack of cybersecurity. They are hacked, victimized by ransomware, and lose data on product and customers.
Writing for Forbes, Dinah Wisenberg Brin says, “Malicious computer viruses and hacks of sensitive information can hobble any business, potentially exposing even a mom-and-pop shop to customer lawsuits, government fines, IT repair costs and bad publicity.
With or without an IT department, you must ensure the safety of your intellectual and digital property.
- You need strong policies for handling and sharing data.
- You must regularly train all personnel and partners on purpose and policy.
- You should optimize your use of cloud-based solutions to store and backup data.
- You must seek advice on securing individual devices and networks.
And, you must concede that you need professional expertise to secure your systems and update the security regularly.
- Failing to hire talent. Startup businesses take unnecessary risks on poor hiring practices. They hire family and friends. Or, they focus on staffing up at the lowest cost.
Money is tight at the beginning, yes. But, your business plan must anticipate hiring needs and costs. There will be a labor burden, and how you hire can make all the difference in the business’s performance and direction.
The Wall Street Journal suggests offers tips, summarized here for convenience:
- Use freelancers or contract employees if you can.
- Get referrals from friends, local networks, and your business advisers.
- Give preference to candidates who have worked for smaller organizations.
You cannot afford employee churn. The cost of recruiting, replacing, and training through employee turnover should help you determine the cost of making good hires in the first place.
So, you must seek to hire talent, not just hands, feet, and eyes. You need talent that is adaptable, resilient, and responsive to growing business challenges.
- Watch yourself. Once you open a business, it is no longer yours. It forms a relationship with partners, stakeholders, employees, and customers. But, the passion entrepreneurs bring to their businesses can damage the effort.
You must learn to turn the business off, find time for the family, exercise regularly, and get some sleep. Carrying everything on your shoulders is neither good for you nor the business.
Following your passion, without an occasional self-appraisal, risks creating and entrenching a disconnect with your employees and partners who cannot see things the way you do.
Managing tightly and narrowly is self-defeating when you do not delegate effectively. You must push work down to more effectively spend your own time and to develop the talents of those supporting your business.
You begin to break this habit by honestly assessing the work you do. You start with determining where and when you are indispensable to the task. Then, you delegate everything else.
Breaking bad business habits
It’s easy to identify your bad business habits from the outside. But, the best first step for entrepreneurs and new small business owners is to become good at self-assessment.
When business owners realize they are not alone in their effort, they see how their decisions affect so many other business functions and people. If, for example, owners fully accept that their business must serve customers, they will form more positive habits. If they appreciate that their innovation only succeeds when they see the light of day, the will manage with more positive habits.
So, you might conclude that, as an entrepreneur, your passion and energies can be much more wisely spent without such bad business habits.