Mark Richardson, CR, is an author, columnist, and business growth strategist. He authored the best-selling book, How Fit Is Your Business? as well as his latest book, Fit to Grow. He can be reached at email@example.com or 301.275.0208.
Many believe success is a product of “seizing the day” or embracing opportunities that present themselves. Others go out and buy lottery tickets and cross their fingers they will be lucky and, therefore, successful. Others believe the harder you work the more successful you become. While all these may contribute to positive results, many better leaders realize success is just as much a matter of what you don’t do versus what you actually do.
Avoiding mistakes in business today may be the most important element to success.
There are many metaphors that relate to avoiding mistakes. A pilot has a very successful and safe flight as a result of a very strict preflight process. A baseball team that can avoid fielding errors and making mental mistakes will generally win. A delicious meal is not necessarily one that is new and creative, it may be just a product of the correct ingredients and the proper cooking times. All these, while simplistic, are a product of not making mistakes to have a positive outcome.
As a student of business and having watched hundreds of remodeling leaders, the most successful are the ones who make fewer mistakes. A friend of mine with a remodeling business years ago said, “If I only had the money back from the bad decisions I made, I could now retire.”
This struck a chord, and ever since I’ve focused on the methodology of not making mistakes and on avoiding the potholes as much as the opportunities. The following are some mistakes I commonly see that could have been avoided.
Avoid These Mistakes
1) Overly aggressive growth: Business growth is like dieting. There is an ideal amount of pounds that a person should lose per month (to lose weight successfully and keep the weight off). If you do a crash diet of 20 or more pounds a month, you run the risk of getting sick or gaining it back. If you lose only a couple of pounds a month, you will not see the results quickly enough to motivate you to continue to lose. Whereas if you target 2-to-3 pounds per week (8 to 12 per month), it becomes more sustainable. Business growth is analogous. Thirty percent or more annual growth for many businesses is like a crash diet. This level of growth affects the basic culture, the product quality, and the team. I have seen many businesses crash and burn with overly aggressive growth.
2) Bad hiring: A bad hire is expensive. Depending on the role it can easily cost you $25,000 to $50,000. If you can avoid some bad hires then think of the improved returns. While you cannot bat 1.000, a low batting average with hires will kill you. Go back three years and list all the people who are no longer with you, then multiply by $35,000 and see what you could have had in the bank—not to mention all the stress, too.
3) Elephant hunting: Many are enamored by the big projects (the elephants or whales). If your business’ sweet spot is medium-size projects, these big jobs can kill you or make you less profitable. If your average-size project is $75,000 then don’t go after the $750,000 projects. I know it is tempting. There are more risks and these projects require different processes that you may not have in place.
4) Working with the wrong client: Give the right client a hug and run from the potential wrong client. Years ago I created a 10-point checklist of the right client. A few of the criteria are: A) Do they value your advice? B) Are they decisive? C) Do they communicate well? D) Are their expectations realistic? E) Are they emotionally stable? If you say yes to all of these then proceed, if not then punt.
5) Lacking a plan: Fail to plan, plan to fail. You would never start a serious remodeling project without a plan. Most businesses dive into activities/programs/processes without a proper plan. Like a remodeling project a good plan takes into account time, recourses, solutions details and risks. A good plan measures and helps you know when to hold them or fold them.
A few other common mistakes include not thinking out important decisions, not doing enough care and feeding of key team members in their development, doing projects that your team is not competent doing, and not getting proper buy-in or alignment from your team members on important decisions that affect them.
As you can see, there may be more ways to make mistakes than not. If you can just avoid the speed bumps and potholes, your business can experience a better chance for healthy growth. And you may even enjoy the journey more, too. PR