Why
following conventional wisdom when starting a business is a deadly trap—and how
you can defy the odds
Darren
Hardy
EUREKA!
You have
an idea for a new business. You are sooo excited that you start telling your
friends and family about it (mistake). You are confident this product solves a
big problem in the market (mistake). You make a vision board and start drafting
your business plan (mistake). You recruit some family members and an
enthusiastic friend to work with you on it (mistake). You know you are ready
and prepared (mistake) and willing to do whatever it takes to make this work
(mistake).
All the
above may sound like good things, but following the textbook approach to entrepreneurial
success is your biggest mistake of all.
Guess
what: 66 percent of businesses fail within eight years. Why are the odds so
long even for people who go out of their way to do everything exactly right?
That’s what I set out on a mission to discover.
The
answers were startling. All the assumptions for this high failure rate
(capital, location, credit, inventory management, and competition) were wrong.
Overwhelmingly, failure was not due to outside factors, but to an internal one.
And it wasn’t economic—it was emotional. The unexpected
and terrifying havoc experienced in an entrepreneur’s life is the
greatest factor in why most new business owners give up or go belly-up.
But it’s
not going to happen to you. Not now. Read, study and implement these preventive
measures to ensure the full potential of your eureka moment.
Mistake No. 1
Being a
big thinker… and trying to “dent the universe.”
As
renowned universe-denter Sir Richard Branson
has said, when the first Virgin business began 40 years ago, there was no grand
plan—especially not for a behemoth that would eventually employ 50,000 people
around the globe. “Had we tried to plan for such a future,” Branson once told Entrepreneur,
“we would certainly have messed it up.”
If you
begin with illusions of grandeur, you’ll probably never get started, or as Sir
Richard said, you will mess it up. You will overestimate your projected sales,
you will overbuild and overspend on the perfect “scalable systems,” and while
you are dreaming of your contribution to human progress, you will miss payroll.
And then it’s game over.
Instead,
start small. Start where you are. Ship what you’ve got. Sell something today.
Then improve. Focus on just getting better every day, rather than on some
imagined, lofty goal.
Now, I’m
not telling you to never set goals. In fact, if you don’t give yourself some
direction, you’ll wander aimlessly into bankruptcy. But on a day-to-day,
practical basis, thinking too big paralyzes you and keeps you from doing
anything at all. You figure if your product or service isn’t revolutionary yet
or you’re not changing the world, you have a convenient excuse to wait, delay
and continue to aim, aim, aim rather than work, work, work.
You’ve heard
it before, “The journey of a thousand miles begins with a single step.” Think
about today’s step. Then with each step you take, work on growing and getting
better. In due time, you might travel so far in your constant growth that the
world feels your step and is slightly dented by it. It can happen!
Mistake No. 2
Being
excited... and expecting those around you to be excited for you.
Someone
once asked me, “How successful does a person need to be?” I replied, “Ah, I
guess, as successful as you can be.” He said, “No, just more successful than
your brother in-law.” Meaning, your wife will be happy with you and her life as
long as it’s better than her sister’s.
Like it
or not, people are constantly comparing themselves to each other. We only know
how good or bad something is by contrast—it’s good, compared to what? It’s easy
for people to read about celebrities and other superstar achievers and see
their success as something out of reach. But if someone in their immediate
circle, someone just like them, breaks out of the herd of mediocrity, it
eliminates all excuses. And most people have become quite attached to their
excuses. When you overcome similar obstacles and succeed, you’re making them
look bad and feel bad. Your success disturbs their status quo, and their ego
becomes vengeful.
Oh, sure,
they’ll say they’re happy for you. They’ll say they support you and your
dreams. But secretly (maybe even unconsciously), they are hoping you will fail.
They are hoping you will prove them right, that the fears that are holding them
back from also becoming a successful entrepreneur are valid. They may even
engage in covert tactics to sabotage your ambitions with weapons of doubt,
teasing, mockery, sarcasm and innuendo to ensure they are right and their ego
is once again secure.
It’s
natural to feel excited about your possibilities and potential, but don’t get
carried away. Prepare yourself for the emotional turbulence ahead, including
the negative voices of the people in your life.
Mistake No. 3
Being in
love with your product… and not your client.
You are
passionate about your product. You have spent countless hours working on it to
make it excellent—the best there is. Unfortunately, the No. 1 seller in any
category is probably not the best product. Look around you. What’s the No.
1-selling restaurant in the world? How about the best-selling automobile, wine,
insurance or face cream? The best-selling brand is rarely the one with the very
best product. Instead, the No. 1-selling product in every category is owned by
the person who is the best marketer.
Like it
or not, your product accounts for only 10 percent of your business’s success,
with 90 percent coming down to sales and marketing. I am hereby putting you on
notice: You are not in the dry cleaning business, the insurance business, the
mobile app business or whatever industry covers your awesome product. You are
in the sales and marketing business, period. So you need to become an expert at sales and marketing.
The first
step? Fall in love with your prospective client. You must learn how to get
inside the head and heart of your prospective client—to feel his desires,
hopes, fears and problems. Learn how to transmit this love through your sales
and marketing communication, and connect with the client heart to heart.
Only when
your sales and marketing are on board will your clients get on board. Then they
will beat a path to your revolutionary product and fund your big dreams.
Mistake No. 4
Being
cheap… and not investing enough in people, marketing and learning.
Adages
become adages because they are true. “It takes money to make money,” is a
perfect example. In growing your business, there are a thousand ways to spend
your money, but there are three that matter most: people, marketing and
personal growth (learning). Let’s focus on people here.
As Jack Welch, former CEO of GE, said to me during an
interview, “No matter the innovations and changes in the marketplace, the one
thing that hasn’t changed is [that] the team who fields the best players wins.”
In today’s dynamic and highly competitive marketplace, the main battle is for
talent.
You
cannot pay too much for the best. In fact, A-level talent is very inexpensive:
A players will always produce above the wholesale price you are paying. But B and
C players are very costly in so many ways.
Considering
that the largest portion of your operating costs is likely to be consumed in
salaries and wages, it is critical that you get team-building right. Just one
bad hire can sink you and your business. The cost of hiring a poor performer is
not simply what you paid them. It’s much higher. When you consider the time and
resources you’ll spend to replace them, the value of lost opportunities, and
the chemotherapy your organization must undergo to stop the cancer they usually
spread, the cost of a poor-performing team member is up to 15 times their
annualized salary. Invest up-front in quality people.
Mistake No. 5
Being
like your father... and repeating the leadership sins of the past.
If you
haven’t looked around recently, you might have missed some fast, dramatic
change! Because technology has reached several tipping points, we are living
not through a state of linear progress, but in a time when change happens at an
exponential pace.
Futurist Ray Kurzweil describes this phenomenon in his essay
“The Law of Accelerating Returns.” He says, “We won’t experience 100 years of
progress in the 21st century—it will be more like 20,000 years of progress (at
today’s rate).” Put it this way: We’ll be developing the skill set to captain
the Starship Enterprise rather than holding the reins on a horse and
buggy.
The
patriarchal, top-down, do-it-because-I-said-so leadership style will not work
in the 21st century. For the first time in human history, we will have five
generations in the workforce at once. Far more women are working. Minorities
will soon be the majority. The landscape was different for your father and
other authority figures from the 20th century. Leading based on what we saw,
experienced and learned in that era would be wrong.
In the
old days, economic competence was an entrepreneur’s most important skill. Now emotional intelligence has replaced it. Human capital
has replaced financial capital; where once leaders set organizational controls,
now they must foster collaboration. Once the goal of the leader was to develop
followers. Now it should be to make leaders out of everyone.
Mistake No. 6
Being
amazing... and trying to do it all.
Our
culture celebrates those who check off sprawling lists of tasks every day. We
exclaim how busy, stressed and overwhelmed we are as if it were some badge of
honor.
It’s not.
This approach will cost you everything: your personal life, your business and
all of your dreams. In order to grow a business, you
have to allow it to grow beyond you.
Think of
yourself as the head coach. Your job is to draft the game plan, recruit the
players, and get them trained and equipped to perform at their best. Then watch
from the sidelines. If you jump in and start throwing, catching, blocking and
tackling, your business will never win the Super Bowl. Imagine Bill Belichick
running to catch a pass during a game!
When you
try to do it all, you bottleneck your business and you become the constraint to
its growth. Think of yourself as the great talent broker. You are paid to bring
the right people together and help them do the work. When you have set the
stage for their success, stay out of their way.
Mistake No. 7
Being
successful... and avoiding belly flops.
The
entire universe is built on duality. Just as you cannot have day without night,
up without down or good without evil, you cannot have success without failure.
It’s not possible.
As a
matter of fact, the process of success is a sequence of progressive failures.
If you
are succeeding only moderately, it’s because you aren’t doing enough to
challenge your limits. My father taught me this on the ski slopes when I was 8
years old. At the end of the day, I ran up to him, excited to report: “Dad, I
skied by myself all day and didn’t fall down once!” He looked at me flatly and
said, “Well, then you didn’t get any better.”
Sensing
my disappointment, he explained, “Look, if you’re going to get better, you have
to push yourself. If you push yourself, you’re going to fall. If you’re not
falling, you’re not pushing. Falling is part of getting better.”
The only
way to accelerate your success is to speed up your failure. Pursue failure with
passion and joy. When you do fall, celebrate it. You’ve grown.
The only
thing holding you back from realizing your potential and accomplishing any goal
your mind can conceive is fear. If you can learn to turn fear into
fun—something you pursue rather than avoid—the top to your potential will pop
open and out will pour your greatness.
Mistake No. 8
Being
smart... and not seeking the help you need.
Michael
Jordan didn’t win a championship for his first seven pro seasons. And then Phil
Jackson became the Chicago Bulls’ head coach, and the team’s fortunes soon
changed. Kobe Bryant spent four years trying in vain to win a title. Then
Jackson went to the Lakers. The difference in both instances wasn’t the
player—it was the coach.
I bet you
are already good. But in order to become great, you need help, as every
superstar does.
Invest in
your learning and growth. If there is one common trait among the superachievers
I’ve ever met or studied, it’s that all are avid learners. They are constantly
looking for the edge, seeking the insight that will allow them to improve and
break through their current ceiling.
As my
mentor Jim Rohn taught me, “You cannot achieve
beyond your current level of personal development. You don’t achieve goals. You
grow into your goals.” Seek the books, videos, audio programs and seminars that
will help you grow beyond your current level of success.
There are
great ideas surrounding you every day. You don’t have to originate them. You
just need to grab them and apply them to your situations. Steve Jobs didn’t
invent the mouse, the graphical user interface, the MP3 player or the
smartphone. But he made them all better.
For every
problem you have, someone has dedicated his or her life, time and passion to
becoming an expert in that area. The longer you spend trying to dream up a new
solution to your problem, the less time you have to solve others and grow your
business.
My dad
taught me, “You can never pay too much to rent someone’s brain and gain their
experience.” While there are no shortcuts in life, they do exist for success in
business. The shortcuts are charted by those who have already been where you
are going and have returned to give you the map of the safest and most
expeditious route. This guidance will save you time, energy, money, pain and
anguish. The ones who have gone before you can warn you where there’s
treacherous terrain and great dangers so you can avoid them entirely.
Their
expert and experienced direction just might save the life of your business.
- See
more at:
http://www.success.com/article/the-8-biggest-mistakes-entrepreneurs-make#sthash.aLKjyhZX.dpuf
The 8 Biggest Mistakes Entrepreneurs Make
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