No matter how great your passion and vision, a few bad habits can drive a promising business into the ground.
Clay Clark, CEO of small-business resource Thrive15, has consulted with entrepreneurs for years, and after hundreds of clients and his own experiences, he’s noticed several recurring traits of business owners who fail.
“It’s usually two or three traits that cause us to blow up,” Clark tells Business Insider.
In his book, “Thrive: How to Take Control of Your Destiny and Move Beyond Surviving… Now!”, he lists 15 of the most common traits of entrepreneurs who end up failing. We’ve summarized them below.
1. They make excuses.
Clark says the most common excuse he hears from clients who failed to achieve a goal is that they ran out of time. It makes him furious. As career guru Seth Godin points out, “I didn’t have time” actually means a task “wasn’t a high priority, fun, distracting, profitable, or urgent enough to make it to the top of the list.”
2. They blame others or outside forces.
“Entrepreneurs who blame the economy, the way they were raised, the weather, the customer, their employees, the acting president, the opposite political party — anything other than themselves — for their situation will never be successful,” Clark says.
3. They are dishonest.
Cheating employees on their paychecks or lying to customers are obvious examples of dangerous dishonesty, but Clark also points out that falsely praising employees instead of giving candid criticism can be just as bad.
4. They are lazy.
“Show me an entrepreneur who sleeps in, shows up late, doesn’t read, and doesn’t like hard work, and I’ll show you a failing entrepreneur,” Clark writes.
5. They are convinced they know it all.
Self-confidence is a necessary trait for someone setting out to start a business, but the ego needs limits. Clark says that failing business owners are often too proud to admit they don’t know something about running their company.
6. They hesitate to make decisions.
It’s necessary to gather as much information as possible before making an important decision, but spending too much time mulling it over slows everything down and wastes money. Gen. George S. Patton once said: “A good plan executed now is better than a perfect plan executed next week.”
7. They have not defined a clear direction for the company.
“No one in their right mind wants to follow an entrepreneur who can’t clearly articulate where they are going, yet most of the entrepreneurs I meet cannot clearly tell me their business goals for the current year,” Clark says. To attract the best employees, an entrepreneur needs to have a tangible vision for the company.
8. They refuse to delegate.
Misguided or egotistical entrepreneurs feel the need to micromanage every aspect of their business, but no one is good at everything, and leaders should be focused on their company’s biggest, most important issues, not fine tuning their corporate website’s homepage.
9. They are involved in a niche that is not scalable.
Clark once owned and ran an entertainment company that provided service only on nights and weekends. This meant that most of the time, his employees were not working and his equipment sat in a warehouse. He says it’s necessary to envision how a company can grow as more resources and talent become available.
10. They are unable to handle confrontation.
“Employees actually stole from me,” Clark says, and though he was aware of their embezzlement, he was afraid to confront them. When employees sense a weakness in their leader, they will often exploit it, he says.
11. They are not organised.
Running a business comes with a never-ending stream of responsibilities, and successful entrepreneurs are constantly arranging their busy lives with a system that works for them, be it a to-do list or app.
12. They serve a niche that cannot possibly be profitable.
Clark remembers diving into a client’s numbers and determining that she needed to sell 1,300 of her products each week to be profitable, but her maximum production capacity was 500 products per week. He says some business owners fail to do the maths and push on despite any chance at making money.
13. They provide a terrible service or product.
Clark once helped a client promote his business to the point where its offices began getting calls constantly. But the business fell through because the receptionist was not only poorly trained but sometimes missing from her desk, and he kept his clients waiting for at least one hour for their appointments even if they were on time.
14. They are bad marketers.
“If you really do believe that your company offers your customers value by solving their problems, then you should want to scream your solutions from the mountaintops,” Clark says. Use your company’s growing size to establish personal relationships in person and on social media, and don’t ever be afraid of being “too pushy.”
15. They ignore metrics.
It is necessary to break your complex business plan into easy-to-follow checklists and management metrics that can be checked on a daily and weekly business. “Whatever you focus on expands,” Clark says.
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