Avoid These "Destroy Your Business" Pitfalls If you want to keep your business up and running, find out what you <i>don't</i> want to do.
Over his half-century career, business and social analyst PeterDrucker has consistently presented the business world with cannyinsights. After decades of observing business behaviors andoutcomes, Drucker distilled the four typical mistakes that undoentrepreneurs at new and growing businesses. All of them, he says,are foreseeable and avoidable.
1. Knowing better than the market. The entrepreneur failsto contend with the fact that their new product or service issucceeding elsewhere than their target market. In essence, theentrepreneur rejects unexpected, unplanned success because itrattles their belief that they're in control.
2. Focusing on profits. Cash flow is the real name of thegame, because growth-spurt companies need continual stoking withfresh money. Drucker says an entrepreneur should start planning thenext round of financing six months before crunch time. Ofcourse, few do-a failing Drucker attributes to financialilliteracy among most business people, not just fledglingentrepreneurs.
3. The management crisis. After about four years ofnormal, healthy expansion, a company usually outgrows itsmanagement base. The entrepreneur has gotten stretched to the max,and when things start to go haywire-as they invariablywill-no one is available to take up the slack. Again, actingbefore a crisis is key. Twelve to 18 months before this bottleneck,the entrepreneur should gather those workers who show managerialpromise and assign suitable roles. Then there's enough time forthem to learn their specialties, for the team to coalesce, and forthe owner to identify and replace any wrong choices.
4. Loss of perspective. Once the company is up andrunning, a different type of danger loom. Focusing on his or herdesires or needs, the entrepreneur neglects to make the needs ofthe business the highest priority. An entrepreneur needs to behonest in determining whether they have the skills or strengths thecompany needs at that time. If not, then it's best to stepaside or adjust one's role.
Excerpted from Extreme Entrepreneur: IntelligentInformation from the Edge