The biggest mistakes in small business

Two big mistakes in small business: 1) lack of clarity on who you serve and why; 2) undertaking big current projects for questionable future needs.

Melinda Emerson asked a good–albeit fairly obvious–question on Twitter just now.

I am working on an article about the 100 Biggest mistakes in smallbiz and how to avoid them. Does anyone have advice to share?

Oh, there are so many big ones.

But there are two big mistakes that I see over and over and over again.

One really big mistake…

…is when startup companies don’t really know what business they are in. They cannot simply answer these questions:

  • Who do you work for?
  • Why do they need you?
  • What do you do for them?

That’s why they remain startup companies, often for years. You can’t really grow the company without sales, and selling is such a struggle when you’re unclear on who needs you and why.

How to avoid this mistake:

It’s simple but not easy. Take some time to consider very seriously:

  • Who are you?
  • What gift do you bring to others?
  • In what way do others need your gifts?
  • What do you need in order to support others in using your gifts?

The answers might not even be consistent with the business you’ve chosen. It might be time to reconsider your focus, and that’s difficult but necessary. Do you want to see what that soul-searching looks like? My good friend Jessica Reagan Salzman spilled her guts about this recently and made a significant course correction. Maybe you need to do the same, even if you don’t feel led to blog about it.

A similar big mistake…

…is when companies unnecessarily undertake projects that are difficult and expensive, relative to their size. Most entrepreneurs are optimists, right? And optimists expect things to go well and their businesses to grow. And part of expecting your business to grow is the anticipation of larger needs in the not-so-distant future.

It’s not at all uncommon for an optimistic small business owner, very often in startup mode, to plan on too-big solutions. In my field, that appears in the form of undertaking very big software development projects that might be perfectly justified in a bigger, more established company but are out of scale for the current state of the startup.

How to avoid this mistake:

So, grabbing another stock expression from Agile software development, I say solve today’s problem today. For heaven’s sake, you have too much to do already and there is no good reason to burn current resources to solve a problem that you may not ever have. Especially if you needed those resources to survive long enough for that future problem to even matter.

The plug

On that note, and this is a plug, if you’re thinking about undertaking a software development project for your small business, I really really urge you to check out my Startup Builder series of episodes on doing exactly that–even if you have no background at all in managing or developing software. The first module, Buy or Build? is available at a really affordable price, and it helps you decide definitively whether to go ahead with it or not. You get a cool flowchart that shows you an overview of the decision-making process, a workbook that walks you right through the flowchart, and a half-hour recording of my friendly, soothing voice giving you all the background and explaining how it all works.

My suggestions didn’t make it into the actual article, but thanks to Melinda Emerson for the prompt!

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