Rome wasn’t built in a day, and neither is a business. Just ask Michael Conway, managing director of Clothes2Order.com. Conway, 42, launched the clothing company in 2002 and has continued to hone the business model to keep pace with changing economic trends and markets. Today the London-based online retailer is thriving, with clients that include Google and eBay.
1. Self-sufficiency: Some businesses work as solo enterprises, but most need to be scalable. If you don’t know how to grow your business without cloning yourself, you’re sentenced to a life of hard labor with an unappreciative boss—yourself! Build enough margins into your pricing so you can hire or outsource the tasks you don’t need to be doing.
2. Product worship: Being product-driven is a fast road to failure. It doesn’t matter how good your product is if the customer doesn’t want it. Know what customers want, what they need and what it takes to get it to them.
3. Neglect: Most often seen in terms of legality, neglect also extends into business plans. When somebody mentions to me that I really ought to be thinking about X, I ensure that X is on my to-do list in the next 30 days. Sometimes X is not a problem, but if it’s a blunder that comes back to bite me, I’ll spend even more time and money solving it later.
4. Picking a tiny target: If you’ve picked too small a niche for your business, growth will cease very quickly, either because your competitors have cornered the market, or you expand to fill the niche and discover there’s nowhere else to go. You might be happy being the big fish in a very small puddle, but it’s better to know if that’s your future before you jump in and muddy the water.
5. Playing the equals game: This one doesn’t look like a sin at all, but it’s a business destroyer all the same. If you have business partners, it’s tempting (and often seems fair) to have equal shares in the ownership. In the long term, however, it’s unlikely that you and your partner will agree on all aspects. Deciding early on who will have the authority to make the tough decisions is important, and that individual will need to have sufficient investment in the business to stay motivated.
6. Time-is-right-ism: Many wannabe entrepreneurs never get a business off the ground because they seek guaranteed success. For true entrepreneurs, the leap of faith is the launch pad, but for those “when-the-time-is-right” entrepreneurs, it’s the point when they stop dead.
7. Overpaying for market share: Habitually spending too much on advertising or incentives is death to a business. Instead perform a rigorous assessment of the potential return and test it thoroughly. Make sure you won’t spend more money getting customers than selling to them. And then enshrine your assessment as a rule so that as your business grows, anybody who has the authority to spend money on customer acquisition knows how to measure the cost against the potential return.