“Experience is making mistakes and learning from them.”
This quote from Bill Ackman has a powerful message, but I’m not so sure that it can be applied in the business world. It is quite normal for entrepreneurs to make some mistakes. There are many daily goals, tasks, people are working under pressure; all that might lead to an entrepreneur overseeing something and letting things slip through the cracks.
Making a mistake in the business world has some serious consequences that can easily lead to closing the doors of your establishment. Therefore, it is best to learn from other people’s mistakes.
Here are some of the most common mistakes that could lead to devastating results for businesses, no matter the industry they are in.
Hiring Gone Wrong
This is very common mistake that leads to a lot of problems. Employees are the backbone of each business and even the smallest mistake in hiring can have serious consequences for all future operations. Focusing on job candidates with flawless CVs and the best education can be misleading in most cases.
Modern HR emphasizes two very important things that lead to forming good teams. One: team members have to share common values so that they can bond. Two: they have to have the ability to trust each other in challenging situations.
Software Escrow
We live in the age of rapid technology and software development. There are no businesses out there that don’t really on at least one IT solution. In some cases, if a piece of software malfunctions, the entire business process stops. But what happens if the company that produced the software is not providing maintenance anymore and both you and they don’t have the software’s code, data and documentation.
This is where a software escrow service comes in. A neutral, third party software escort agent holds onto all the software documentation and code until a mutually-agreed-upon event occurs. In case you are purchasing software from a vendor that is not financially stable and could go out of business, software escrow is the smartest solution that you can go for.
Not Knowing your Limits
Responsibility is a very important virtue for any human being. Among many other reasons, it is the sense of responsibility that created the working structure within organisations we are all familiar with now. When establishing the modus of operandi, responsibility is dispersed throughout the system so that every employee knows what their responsibilities and requirements are. With the whole organization functioning this way, it is much easier to identify and solve any problems and, also, develop the means to prevent such an occurrence in the future.
On the other hand, business owners have the tendency to take everything onto themselves. There is no task delegation whatsoever, at least not for the most important tasks. This has shown to happen even if the leader does not have the necessary skill set to successfully complete the task. This may lead to catastrophic results.
Neglecting the Importance of Legal Contracts
In today’s world, it is very important to look for legal advice right from the start. This might seem like a big investment, but in a long run, it can save you serious cash. Another related problem to this common one is hiring an attorney who does not have enough experience with your type of business and who doesn’t understand your business.
These contracts should cover all aspects and a wide variety of unforeseen situations that can happen in the future like, for instance, a customer or a client not paying for services or products, a former employee suing, etc.
Running with No Contingency Plans
Contingency plans don’t have to be relevant to finances. These plans have to be set should anything bad happen. This is very important that all business owners have to take in order to increase chances of surviving for a long time; especially now, when all markets are over-saturated and volatile.
There are no light mistakes in the world of business, because you can never exactly predict the consequences of making them. This is why in-depth research is a must, regarding all aspects of your establishment. If you want to continue reading about other common mistakes and discover how to prevent and handle them, you can find tons of articles online that cover this topic.