Top Two Mistakes Start up Entrepreneurs Make

Recently I was in conversation with an entrepreneur of a small business and he shared how after five years in business he was still doing more work than the rest of his staff put together.
This is one of the top two mistakes entrepreneurs make. Often entrepreneurs get into areas that they executed well or were on top of in the industry and believe that will be enough to make it big in business. Unfortunately that is NOT what an entrepreneur does.

So what is an entrepreneur’s job? An entrepreneur’s job is to make himself redundant in his own organization so that he can do one of the two things that ultimately most entrepreneurs want to do:
1. Sell the company, make money and go on to the next big thing
2. Sell the company and retire and reap the fruits of his labour.

Either ways the question to ask yourself is after the initial years how would the company do if you were to die? Are there enough systems in place that the Organization continues to run smoothly and make profit for your family even if you were removed from the equation? After the initial years are you still like the first time manager who continues to do everything himself and just cannot bear to delegate? As a start up entrepreneur, with your business in a nascent stage it is vital to cultivate habits that help you make the next big leap.

Mistake One: Are you afraid to delegate?

One of the biggest mistakes that start up entrepreneurs make is that they don’t delegate enough. Their state is very much like the first time managers who get promoted because of their above average ability to sell/write code/maintain good CRM scores, etc. However the role of a manager is to ensure that the entire team develops an above average ability to sell/ write code/maintain good CRM scores, etc. Entrepreneurs get too caught up in execution that leaves them little time to strategize? Here are some questions that you might want to ask yourself:

1. Are you a bottle neck for your own Organization’s growth? Here’s how you can find out. If you notice that all the work is being delegated upwards in your direction, chances are you ARE a bottleneck. If a matter is not a decision for you, delegate it. Force responsibility downwards. Find problem areas, add structure and delegate. The pressure is to do the reverse. Don’t work for your employees! Because when upward delegation becomes the norm employees pass on both the work and the responsibility of its outcome to you and drag you further into the quicksand of execution.
2. Have you reviewed the utilization of resources in your Organization? If you are challenged in the delegation area chances are your team members are definitely slacking off or too few people are shouldering the burden of productivity which can lead to resentment.
3. What is your long term plan with your Organization? Do you have one? And if you have one where are you in meeting the short term goals that will lead you to your goal? When was the last time you stopped the fire fighting and actually reviewed where you were going and course corrected?
4. When was the last time you took a step back and did something new with your services/products?

The disease to micromanage and not delegate has a direct effect on the bottom line and attrition. Often in a bid to save money entrepreneurs do all the work themselves instead of delegating it to existing employees or hiring someone to help them take care of things that unnecessarily cuts into their time and takes the focus away from areas that truly require their attention. Which brings us to the next mistake.

Mistake two: Are you being penny wise and pound foolish?

Money is usually tight for start ups and as a result most employees end up multi tasking and do much more than they would at a bigger, more established Organizations. Hence, you would be attracting two types of people: The passionate and the bottom scrapers and desperate. Retaining both these types of employees is challenging for the entrepreneur. Assuming that the Passionate are also skilled then understanding why they chose your Organization over a bigger one is critical. Is it because they believed in your vision, the uniqueness of the product/service, or the excitement of co-creating something together? What is it that keeps them going? This is your ‘hook’ for keeping them with you. Almost always these things change when the Organization goes from a mere start up to a small scale outfit. The true challenge is to take with you the people who helped build your business, and then to have these people become entrepreneurs of their own departments, passing on their expertise to others so that they are freed up to do the strategizing and help take the Organization to greater heights.

As far as the really desperate and mediocre are concerned, there are two ways to deal with them. Ask yourself if it is worth paying one good resource for the price of two mediocre ones? My experience has taught me that your Organization will be as good as its people. If you are penny wise and pound foolish you will pay the price in the long run, both in terms of the speed at which the mediocre ones finally become productive as well as the resources spent on training them to shape up. However, you don’t always have to hire a horse to do a donkey’s work. Certain roles can be managed by your bottom scrapers and with time and encouragement they can turn into noble steeds that win you the race in the long term.