Here are eight things entrepreneurs and small business owners should never say to themselves:
- "I deserve a reward for all my sacrifice." Taking needed cash out of the business as some form of reward for blood, sweat, and entrepreneurial tears will ruin your business. If your business spins off bundles of cash, great. You earned it. If it doesn't, how hard you've worked doesn't matter. "Deserve" has nothing to do with it: You only deserve what your business generates.
- "I just need a great idea..." Ideas are exciting but relatively worthless. Executed ideas are priceless. Searching for a brilliant idea to save your business is a sign you lack the discipline to roll up your sleeves and do the execution dirty work. If your business model is sustainable, find ways to fix what is broken. Those are the only ideas you need.
- "We don't have enough money." Who does? According to the Census Bureau via BNET colleague Erik Sherman, 30 percent of small businesses were started with less than $5,000, and 10 percent of owners used a credit card to at least partly fund the business. Few companies have plenty of money, but many have enough. Cut what needs to be cut and focus on sales before you worry about finding money for capital improvements, expansion, or paying yourself a better salary. You'll rarely find the answer to your money woes at the bank or at a meeting with VCs; the answer lies within your business. Stop worrying about what you don't have and leverage what you do have.
- "Our customers are incredibly loyal." Where my local bike shop is concerned, I'm a great example of loyalty. Service, courtesy, professionalism, friendliness... all off the charts. I'm so loyal I could pay less online but would actually feel guilty buying elsewhere. But say I wanted to buy a $6,000 bike. Would I buy elsewhere at $5,900? No. $5,800? No. $5,500? Well... maybe so. Ultimately customer loyalty is based on self interest. For example, your prices may be higher, but your service and reliability may outweigh (small) price differences -- until they don't. Loyalty is earned, never given, and can be "earned away" by competitors at any time.
- "I can trust them..." You absolutely should trust your employees. But trust does not mean taking a hands-off approach. Great leaders extend trust but great leaders also check in frequently, follow up regularly, diligently monitor performance and results, etc. Requiring frequent status reports, for example, does not imply a lack of trust -- instead it shows you care about the project and the employees involved. Any task important enough to be delegated is a task important enough to track.
- "My employees are one big happy family." While you can certainly try to create a family atmosphere, a business should never operate like a family. Your employees are a collection of individuals who work towards a common goal. Employees, like customers, act from self interest (in a good way); when their interests no longer align with that of your business, they leave. And rightly so. Should you be friendly and caring? Absolutely. Should maintaining a "family atmosphere" get in the way of making a reasonable profit? Never.
- "If we just make a few more cuts we'll be fine..." If your background is in operations, when you're struggling you will naturally focus on boosting productivity and efficiency while minimizing costs, but a major imbalance in revenue and expenses sometimes cannot be fixed by cutting costs to the bone. Often additional sales are the only answer, and cuts could make generating sales that much harder. Sometimes there is no way to save yourself to profitability; make smart cuts and otherwise sell, sell, sell!
- "I'm just like any other member of our team." Owning a business is a little like being a celebrity: You don't know everyone, but everyone knows you. What you do, what you say, how you say it... your every move is scrutinized by employees. All employees are important, but you are more important -- or if not more important, you certainly have more authority and therefore responsibility. Absolutely say, "Every employee is important." But never say, "I'm no more important than anyone else." When you do, you abdicate responsibility that is naturally yours.
- "Word of mouth will eventually pay off." No, advertising and sales will eventually pay off. Advertising is the cake of sales and word of mouth is the icing. Happy customers expect to be happy -- otherwise they wouldn't be customers. Most won't praise your business to everyone they know. Word of mouth certainly contributes but will only generate a slice of total revenues. Sit and wait for a wave of grass roots support and you'll face a tsunami of losses instead.
- "I shouldn't step in." As BNET colleague Tom Searcy notes, sometimes business owners need to stop delegating and just make stuff happen. Learning opportunities are valuable, but time and money are also of the essence. Before you delegate, decide how long you can afford to step back before stepping in makes sense. Then track progress and when necessary take over. Employees can still learn, even from an abbreviated experience, as long as you keep them involved after you take the reins. As a business owner, your job is to make things happen -- especially when others are struggling.
Note to Readers: Check out my BNET series The 11,500 Foot View, the chronicle of my attempt to accomplish an impossible goal, remain in the good graces of my family, run a business, stay sane, and blog about it. If you like self-inflicted pain and suffering, you'll love this.
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