Jon M. Huntsman School of Business

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Wednesday, August 8, 2012

Ten Horrific and Significant Business Mistakes to Avoid

Ten horrific and significant business mistakes to avoid

As I returned to my hometown last weekend, I realized how much I learned while growing up there. I remembered by successes but also my failures. Some of the most beneficial life lessons I learned were through mistakes, and I often find myself preaching to others to not make the mistakes I made to save them the trouble.

Allen Hall, contributor for Forbes and successful businessman, wrote an article for the Standard Examiner on the top 10 biggest mistakes a business person can make. I found these mistakes great information and would like to share them with you.

The first mistake was dishonesty. This characteristic is all around us in the news today. Being dishonest will get us nowhere fast.

The second is a corrupt culture. “Organizations that mistreat employees and abuse customers are ripe for failure,” Hall stated. Having beneficial relationships can improve a business faster than anything else. Be careful as a leader to not get too arrogant or greedy for these are the first signs of corruption.

Third on the list is terrible money management. Even if your business idea has the potential of great success, if you cannot manage money, you will be brought to your knees. “Company management often has not developed a financial plan that considers three scenarios: conservative, expected and extraordinary performance, and what to do financially with each situation,” Hall said.

The fourth is pathetic revenues. “No firm can grow or prosper without planned revenue attainment. If there are insufficient paying customers, both current and potential, to sustain an enterprise in the short and long term, economic viability is questionable,” Hall said.

The fifth mistake we can make is thinking that our customers are not relevant. If we do not pay attention to those who keep us in business, then we will be out of business. This might also block innovative ideas and all improvement.

Along with that is the sixth mistake of dreadful customer service and support. We can all think of at least one place we’ve been where the customer service was less than tolerable. “Leaders who over-promise and under-deliver will watch a steady stream of unhappy customers head for the door, while also telling their friends to shop elsewhere,” Hall said.

The seventh is customer concentration. Companies that engage with one very large customer are at high risk. “I have seen several companies declare bankruptcy when the big buyer selected another vendor or pursued another strategic direction,” Hall said.

The eighth is that of no vision and no strategy. Setting and achieving goals is to some, the best way to reach the impossible. “When leaders do not understand why the company exists, or have a clear and knowledgeable view of what it can become and how to achieve that, the organization will not survive,” Hall said.

The ninth mistake is no priorities and no processes. Simply, “firms that fail don’t have key objectives,” Hall said. If we are not held to a responsibility, it is easier to slack or to do meaningless activities.

The final mistake is that of wrong workers. Hiring the wrong people can kill an organization. “If they are incompetent, tasks won’t be accomplished. If they don’t fit an exceptional company culture, they will be disruptive and negative. If they are dishonest, they will steal and lie. If they are not happy, they will abuse customers and fellow employees,” Hall said.

For every negative mistake we make to ruin a business, there are hundreds of positive ways to make our businesses succeed. I hope we can learn from the mistakes of others.

Klydi Heywood

1 comment:

  1. Mistakes are the steps to life learning lessons, I couldn’t agree more! I especially think that the fifth mistake is the most important, not thinking that ongoing customers are important. I currently have a salon and those customers that come monthly are critical, and should be treated like it was their first time! They are the foundation, and without the foundation you crumble. The eighth mistake is also one that I see done all the time because people don’t think it is important. Having a goal and plan is necessary; NO ONE is going to just give you what you want. When I conduct hair salon training courses, I also focus on Business Intelligence. Yes, the strategies are important but the business involvement is equally important. Thank you for the tips, I find that I have made many of these, and I also find myself informing people to not make the same mistake. However, sometimes you have to make the mistake yourself to really learn and grow!