Once your business grows to the point where you can no longer do everything by yourself, strong management skills are what separates a highly profitable business from the pack. Unfortunately, most business owners aren’t formally trained in how to properly manage a business.
I’m a prime example of this. I was a great certified public accountant (CPA) when I started my business, and I even had experience managing a department of over 30 people at Coca-Cola. Running a CPA firm, however, was another challenge entirely.
Here are 10 of the most common management mistakes you should actively avoid.
1. Not having long-term goals or a plan for reaching them
Without a goal, you’re merely drifting. Without a plan, you’re merely dreaming. It’s critical that you make a habit of setting and reevaluating your business’s goals each year. Then, create a clear plan for achieving or making progress towards those goals each month.
2. Not aligning goals, strategies, and business systems with values
If you try to sell or accomplish something that doesn’t align with your personal and corporate morals, you’re setting yourself up for failure.
I once passed all of the tests to start selling insurance and retirement products to my clients, only to find six months down the road that I was sabotaging my sales due to a conflict with my values.
3. Not recognizing a new threat or opportunity
There are countless businesses that have either fallen into financial turmoil or left money on the table because they weren’t able to recognize a particular threat or opportunity.
One of the best examples of this is Blockbuster. The company failed to recognize digital content as an opportunity in their industry — an opportunity that could easily have been identified with an annual SWOT analysis. Rather than continuing as a major player in the home entertainment industry, they were eliminated.
4. Not knowing how to hire good employees
Employees are arguably a business’s most important assets, yet identifying talent is a blind spot for many business owners.
While a bad employee may cost a company thousands of dollars by the time they are fired, a mediocre employee may stick around for years — producing mediocre work that leads to a mediocre product or service.
5. Not keeping good employees
After landing good employees, you must work equally hard to keep them. The truth is that great employees are looking for more than a stable job, fair compensation, and an attractive benefits package.
They want to be challenged. They want opportunities to grow and advance in their careers. Make sure you have programs in place that will allow them to meet their own personal and career goals.
6. Not having clear job descriptions
Without clear job descriptions for your employees, you can expect there to be confusion, overlap, and lost productivity.
What’s more, employees will often create their own jobs in order to fill time, or worse yet — do very little work at all because there are no clear job requirements.
7. Not developing strong leaders and managers
For your business to grow, you need strong leaders and managers throughout your organization.
Unfortunately, great leaders don’t just appear. You must invest in them and their development. As you would imagine, this takes time — don’t wait until you absolutely need them!
8. Micromanaging employees
Many business owners think that the only way to get a job done is to be involved in all aspects and decisions of the business.
This has the opposite effect. It stifles the employee’s productivity and initiative. As a business owner, you should be focused on growing a profitable business rather than managing every task. Instead, empower your employees to be confident in their roles and make smart decisions.
9. Not having proper systems and procedures
A lack of systems and procedures leaves consistency in the hands of your employees. Most of the time, your employees are going to choose what they believe to be the best or fastest method, and your products and services are going to be inconsistent as a result.
Create clear systems and procedures for your business and make sure all of your managers and employees are aware of them.
10. Failing to manage your time effectively
Running a business is both challenging and complicated, to say the least. On any given day, it’s easy to get so lost in your business that you run out of time to work on it. However, intentionally working on your business is the only way to grow your business and increase profits.
Look closely at how you spend your time. You should be able to commit a minimum of four hours each week toward improving your business.