Monday, January 27, 2014
My Best 5 Mistakes as an Entrepreneur
I would like to call them my Best 5 mistakes instead of top 5. Even though I am listing out my best 5 mistakes, don't be ever afraid of making mistakes. So all the best for making your best 5 mistakes. Come out with your best 5 mistakes.
However don't expect to learn everything from your own mistakes. One life time may not be enough to learn everything from your own mistakes. So learn from others' mistakes as well. Just from this point of view I am listing out the top 5 mistakes I made. There might be other writers who will point out their top 5 mistakes and readers can learn from them as well.
I have made hundreds of mistakes in my 5 years of Entrepreneurship and I do not regret any one of them since all of them were great learning experience. There are still people telling me that the biggest mistake I made was starting my own business. You also will face same allegation, but we have to realize that starting a business is not a mistake at all. But leaving the dream halfway is the biggest mistake which you will regret for ever.
It is worthwhile to mention that it is good to have a mentor for your journey who can guide you properly so that you can master in intelligent mistakes. I am glad I did.
So here are my Best 5 mistakes, not in any particular order since I do not know which one is the best one.
1. Too many partners especially with equal power
I had couple of failed businesses in which we had at times upto 7 partners, all of them with equal decision making power. I am unable to shortlist criteria for selecting partners, but definitely all the partners should share same vision and should match the wavelength. The partners have to complement each other in their capabilities and knowledge. Integrity and character are more important than education and capabilities. The roles, responsibilities and goals of each partner should be well defined to the minutest terms.
2. Depend too much on a partner or employee
You may have high expectations on a partner or an employee. However as soon as you start realizing that his performance is poor, you have to seek alternatives. From the beginning you should have goals defined for every partner and employee and if he fails to achieve, don't waste time expecting that he will improve. It is very difficult to changes attitude of a matured adult and more importantly you don't have time.
3. Be Frugal
Even if you have sufficient capital, be frugal. Allocate and lock funds for future expansions. It will give you good insight for tougher times. Also being frugal will give more creative ideas.In my first business, I thought we had enough money and spent a lot of money in offices and marketing etc. and we became bankrupt sooner than expected.
4. Money Management & Cash flow monitoring
Since you are the business owner and possibly the authorized signatory, don't expect that you are the best person to manage the money and cash flow. There are people who has education and experience for the same. Even if you are highly qualified in accounting have some one else do that since they'll have a better perspective.In our case the cash management was monitored by financially unqualified partners.
5. Focus, Focus, Focus, Focus.....
Focus for One inch width in one mile depth, not one mile focus in one inch depth. This is extremely important especially in initial stages. Focus on your core values and strength and focus only on those capabilities. You should know where you are going. You should have a clear mental picture of what your company will look like in 2 years,5 years, 10 years. Have a mental picture with as much details as possible.
So go out. Make the best of your mistakes.
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