The Biggest Mistake New Entrepreneurs Make

Kona Impact has worked with probably more than 1,000 businesses in the past ten years. Most are small and medium-sized businesses, and large amount are startups, new businesses that in the very early stages.

There are, of course, many things that need to go right for a business to grow and become sustainable. The products or services need to be right for the market. The pricing needs to be right. These are all givens, and most entrepreneurs figure these out fairly quickly.

The one thing that seems to be a make or break them is the ability to go beyond the “I’ll-do-it-all-myself” mindset and to seek out experts in areas in which they lack skills. That is, being an extreme do-it-yourselfer makes it almost impossible to grow a sustainable business. Even most successful artists have managers. At some point you need others, and the sooner you realize that, the better chance you will have to grow your business to a profitable (and worthwhile level).

Here, at a minimum, are the elements you need to master to start and grow a business:

  • Branding
  • Business Logo and Collateral Design
  • Product Design or Purchasing
  • Service Offering Specification
  • Sales
  • Marketing
  • Legal
  • Information Technology Management
  • Accounting/Bookkeeping/Taxes
  • Supply Chain Management
  • Customer Service
  • Equipment/Vehicle Repair and Maintenance
  • Human Resources

I encourage business owners to look at this list and assign a letter grade to their skill level. For example, if you are awesome at sales–“A” level–but you have no bookkeeping, legal and branding experience, these are the jobs on which you want to work with a local supplier.

Here are four things to consider:

  1. In the global, connected and hyper-competitive business world in which we live, most businesses require “A” or “A-“ know-how and execution in nearly all the elements needed for a successful business.
  2. I have yet to meet the person who is at an “A” level in more than a few of the items above. This should be expected.
  3. Those who micromanage and try to do everything themselves are likely to be wasting a huge amount of time, money and opportunity costs, when they try to do everything themselves. They will also accomplish these tasks poorly and to a low degree of professionalism.
  4. The strategy of not doing what you’re not good at, and not hiring someone to do those things, is a recipe for disaster. Avoidance of crucial elements of a business is never a good strategy.

I like to call this the “entrepreneur’s curse”: we know enough to feel confident in many areas and we are too confident to know that we don’t know enough.

entreprenuer mistake

One strategy we took at Kona Impact was to assign employees to become experts in areas in which they have an interest and pre-existing skills. Others, like legal, bookkeeping, equipment maintenance and some product design tasks were outsourced immediately. I didn’t want to learn how to fix my office air conditioner, clean my carpets and write basic contracts. I knew I needed them, but I also knew that my time would be much better spend on things at which I was good.