If you are a start-up business or an already established company, you probably have a lot running through your mind. Am I spending enough on advertising? Are my prices at a competitive level? Do I have the right team? Those are all important issues we have to address as entrepreneurs. Because of the challenges we have to overcome on a day-to-day basis, it is easy to become overwhelmed and get distracted.
No one ever knowingly makes a bad choice, rather those decisions are made by clouded judgement. When that happens, it is very easy to make simple yet critical mistakes. Here are three mistakes that you must do your best to avoid.
1. Not knowing the language of business
Whether you do your bookkeeping in-house or hire an accountant from outside your company, simply having someone to journalize your transactions for you is not enough. You have to develop an understanding of accounting, the language of business. Profit and Loss statements seem straight forward, but do you recognize what is driving the business? You don’t have to become an expert, professionals devote entire careers to become experts in just one section of the accounting standards. But having a basic understanding of what your financial statements are telling you will be key for your company to grow.
2. Forgetting your higher purpose
As your company grows and financial performance improves, dollar signs can very easily change the way we approach our business. The most successful companies, big and small, never forget why they went into business in the first place. Did you start your company simply to make money? Or did you become an entrepreneur to solve problems? Knowing the difference and deciding which side of the fence you are on can either propel or paralyze your business.
3. Having fancy titles
Establishing your own start-up and seeing it grow is both a challenging and rewarding process. That type of growth takes a good skill set, great decision-making capabilities, and a tremendous amount of determination. What it doesn’t require is having a fancy title on your business card. Particularly for young business owners, a self-appointed title means nothing if you don’t understand how to develop your product and service lines and enhance your brand. The quality of your work will determine your reputation within your industry, regardless of your title. Anyone can order business cards and be the President and CEO of a one person operation, it takes a real entrepreneur to be successful.
Acknowledging these three fundamentals is crucial, yet they are simple to understand. It reminds me of what the character Lou Mannheim said in the movie Wall Street: “Stick to the fundamentals. That’s how IBM and Hilton were built. Good things, sometimes, take time.”