If I had to go back and have a conversation with myself when I started Officeheads, I probably would have said, “Wait! You have to remember A, B, C, D andE and that’s just the beginning!”Of course, in reality, none of us have the ability to stop time. We make mistake after mistake but we learn from them (hopefully).
So, as I share the top things that entrepreneurs don’t think about when starting a business, I have to provide that small disclaimer and say absolutely nobody starting a business has it all “figured out” from the start.
That said, if you can learn just a little bit more from the very beginning, you will avoid a pitfall or two that can save you from a lot of headaches while preserving your precious dollars.
#1: Processes? What Are Those?
If you’re like many entrepreneurs, you started a business because you had a passion you wanted to pursue while at another job and one day, you finally said, “I think I can do this far better on my own.”So you jumped right into entrepreneurship without giving a lot of thought to any of the mechanisms or systems. For a period of time, you probably got by functioning day-to-day without directly creating standard processes.
Now let’s fast forward to the 2-year mark. You’re doing a good job of proving your model, improving upon your elevator speech at networking events and tweaking your services. You’re beginning to make consistent money. Yet, while your revenue has grown, there haven’t really been any processes that have grown with you. Finally, as you sit in bed at 11pm doing Quickbooks, you say to yourself, “I can’t do this anymore!”Now it’s time to put the pieces in place that can run in the background while you are focusing on your core responsibilities.
I always hear business owners say, “I wish I could just clone myself to get all this stuff done.”It’s not really about cloning yourself, though. Because if you clone a carbon copy of yourself who doesn’t understand how to employ certain processes on a very disciplined level, cloning won’t get you anywhere. You’ll be able to check a few extra things off your list perhaps, but you’ll be right back where you are now before too long.
That’s because you’re focused on getting things done without any rhyme or reason as to how. As you scale, this area becomes even more of a challenge to overcome without a true process in place. No wonder so many entrepreneurs feel frazzled as though they’re always operating in a chaotic environment – without a process to lend order to their tasks, it may be their own doing! Sound familiar?
#2: Saying “Yes” To Anyone With A Dollar
Too often, we see business owners saying “yes” to every possible opportunity under the sun and then thinking how they’re actually going to deliver what they said they would. When you do that, you fall into a trap of trying to appeal to everyone and muddling your message.
It can be tempting to chase all kinds of business when your bank balance is low. But if it leads to an engagement that is clearly not a fit for your strengths, for the good of all parties, you need to take a hard look at whether or not you can truly deliver on it.
Yes, I know you’re worried about saying“no”. And yes, you may have to wait longer than you’d like for the next project to come your way. But what if you say “yes” to something undesirable and then that opportunity you really want comes along right afterward? You may actually have to pass on the one you would enjoy because that other client – the one you reluctantly took – is eating up all your time. Learn to say no.
#3: Failure To Acknowledge Your Own Weaknesses
We all have personal weaknesses. What are yours? Entrepreneurs make the mistake of thinking that if they reveal any weaknesses, it somehow means that they are going to be doubted in the marketplace. Not true. Being brutally honest with yourself about what you do best and where you have challenges is only going to serve you well at the launch of your business and beyond.
How so? By playing more to your strengths, you can work with those clients who fully appreciate what you do best. We’re talking about the kind of people who will be your greatest ambassadors, singing your praises to others, being a delight to work with and hopefully a profitable customer for you as well.
#4: Working In Your Business Without Adapting
You have a model that needs to be not only proven but also tweaked but also improved upon over time. Entrepreneurs who reach a stage of proof of concept can get complacent, especially if they reach a year or two into the business with a moderate degree of success. Others think, “We made it! We’re successful and have learned a lot. Now what?”
Now what is when you have to elevate your game by perfecting the model you have. After all, aren’t there some things that could run better? Were there any moments in the last two years where opportunities were lost due to a failed system? What went wrong and what would you change by tweaking your operations to ensure it doesn’t happen again? Are there customers – and lost customers – you could speak with to gain valuable feedback?
You can’t truly be a better and smarter business today versus yesterday if 1) you don’t learn and 2) don’t incorporate what you learned into the business model.
#5: Forgetting That Time Is Money – And Tracking It As Such
Gosh, where did all the time go, right? As entrepreneurs, it seems we never have enough of it, especially when we have our heads down, working away. Come to think of it, why aren’t we tracking all of this time we’re spending right down to the minute? If you’re going to budget accurately and track your profitability going forward, you need to have a consistent time tracking mechanism in place that connects your time to the rates you’re charging. It can be quite the eye-opening experience to see how much time and money you’re spending per client. You’ll also likely be more protective of where and how you spend your time once you understand how valuable it truly is.
There are plenty of good time tracking tools out there that you can use – Harvest is our favorite. Whatever you use, no matter what, get in the habit of tracking your time.
#6: Invoicing Without A Schedule
If you invoice haphazardly, clients will pay haphazardly. On the other hand, if you want clients to pay on time, start by being consistent with your own invoicing schedule.
What we frequently hear from entrepreneurs is that they got lost in doing the work and forgot to send out an invoice until later in the month, which creates potential cash flow issues. If you set your account up for electronic invoicing on a recurring basis every month on the same date, clients will quickly get the message that because you’re on a schedule, they should pay on a schedule too. If they don’t, have a plan for what your next steps will be. They missed the payment window? They get an automatic reminder the first day they are late. No exceptions. You owe it to yourself and to your business to be this firm.
And Don’t Forget!
Finally, there’s one more big thing that entrepreneurs forget to do out of the gate and even many years after opening day – a failure to establish good financial practices and systems. If that feels intimidating, we get it.
That’s where Officeheads can help. Not only can we provide a team to help you focus on what you do best, but we teach you how to put them into practice. That way, you can know where you stand financially as a business and spend fewer nights wide awake at 11pm in bed wondering, “Am I OK as a business? Am I doing something wrong from a financial sense or doing everything that I should be doing?”
Take back control and calm your nerves with the whole financial story. Call us at 847.866.8877 today.