Get All Access for $5/mo

5 Management Mistakes Almost Every New Entrepreneur Makes In practice, managing people is far more challenging than most aspiring business owners realize.

Edited by Dan Bova

Startup Stock

Many people seek entrepreneurship because it allows them to be the boss. You get to make all the business decisions, from general company strategy and positioning to the management of your human resources. It's an appealing position on paper, but in practice, managing people is far more challenging than most aspiring entrepreneurs realize.

Prices, laws and markets can all be itemized, quantified and predicted, but human beings can't be analyzed the same way. This makes it almost impossible to come up with a universally successful management strategy. While many new entrepreneurs convince themselves that their businesses will be different and their people will all be thrilled to work there, the reality is most business owners are unprepared for the rigors of successful management, and end up making critical mistakes.

Related: The 5 Leadership Behaviors You Need to Boost Employee Engagement

These are some of the most common management mistakes I've seen in new entrepreneurs:

1. Creating an imbalanced culture.

When you start out, you might be tempted to create the ultimate stress-free work culture. You might create an office with no set hours or unlimited vacation days, or you might go out of your way to make sure every person you hire becomes friends with everyone else.

These down-to-earth, modern approaches to work culture are effective in improving job satisfaction and motivation, but only if they're balanced with structured rules and professional expectations. Remember, your work culture needs to be balanced.

2. Hiring too quickly.

A large multinational business with 100,000 employees can afford to make a handful of bad hiring decisions, but a startup with an initial team of five can't afford that same luxury. As a new entrepreneur, you're understandably and appropriately excited to get things moving as fast as possible, but you can't rush your initial hiring decisions.

Your first-round team members will be the ones carrying you through the early stages of your business's development, and their skills, motivations, and personalities will ultimately determine whether your course succeeds or fails. Take your time, vet your candidates carefully and only make a decision once you've spent serious time considering your options.

3. Failing to give feedback.

I've seen many entrepreneurs fail to give feedback to their workers, but the reasons seem to vary. Some are uncomfortable with the idea of giving criticism. Some don't know how to give feedback effectively. Others just want their employees to handle everything independently. None of these reasons are good.

Related: As a Manager, Here Is How to Keep Employees Engaged

Feedback is what keeps your employees going, and what helps keep them pointed in the right direction. Feedback helps you reinforce positive work habits, gradually eliminate bad work habits and keep your employees motivated all at the same time. Without that feedback, your problems will escalate, your workers could go off-course and morale will inevitably drop.

4. Neglecting the individual.

It's easy to think of your staff as "your staff" or as "your team," because they are -- you hired each of them and you expect them to work together under the identity of your brand. But each of those people you hired is an individual, and is wholly unique from the other individuals you hired. Each one has unique strengths, weaknesses and a style of work that demands an individualized management approach.

Trying to use the same management strategy for all your employees -- such as motivating them the same way or providing feedback in the same way -- is an egregious mistake, and it's unfortunately one I see often in the world of entrepreneurship. Give your employees individual attention, and transform your strategies to serve them.

5. Not letting people do what they do best.

Hopefully, you hired these team members for a reason. You trust them to carry out the work they know how to do best, whether that's making financial projections or writing code. If you're going to be successful, you need to learn to let those people do their own work in their own way, and not distract them from those tasks. That means you can't step in and do their work for them (even if your intentions are good), you can't bog them down with work unrelated to their area of expertise and you can't micromanage them when they already have a plan of attack.

It's your job to set direction and assign tasks, but for the most part, you need to trust your team to handle their own responsibilities and focus on the big picture.

These mistakes are painfully common, but that doesn't mean they're unavoidable. It's impossible to predict how every person will act in every situation, but you can prepare yourself and your business for the inevitable human resource challenges that will arise. Learn from the mistakes of others, and don't underestimate the responsibilities you have as the de facto human resource manager in your new business.

Related: 8 Ways to Get Your Team Thinking Creatively Like Children

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick


How to Close the Trust Gap Between You and Your Team — 5 Strategies for Leaders

Trust is tanking in your workplace. Here's how to fix it and become the boss your team needs to succeed.


6 Cost-Effective Ways to Acquire Brand Ambassadors

Boost your brand's visibility and credibility with budget-friendly strategies for acquiring brand ambassadors.

Health & Wellness

Get a Year of Unlimited Yoga Class Downloads for Only $23 Through June 17

Regular exercise has been proven to increase energy and focus, both of which are valuable to entrepreneurs and well-known benefits of yoga.

Growing a Business

He Immigrated to the U.S. and Got a Job at McDonald's — Then His Aversion to Being 'Too Comfortable' Led to a Fast-Growing Company That's Hard to Miss

Voyo Popovic launched his moving and storage company in 2018 — and he's been innovating in the industry ever since.

Side Hustle

'The Work Just Fills My Soul': She Turned Her Creative Side Hustle Into a 6-Figure 'Dream' Business

Kayla Valerio, owner of vivid hair salon Haus of Color, transformed her passion into a lucrative venture.

Business Culture

Why Remote Work Policies Are Good For the Environment

Remote work policies are crucial for ESG guidelines. Embracing remote work can positively impact your business and employees.