Your Mindset Can Get You Into Trouble In Business
My goal is to help solopreneurs think like entrepreneurs and grow their incomes and profits. It’s exhilarating and challenging work. One of the biggest obstacles in making the transition from solopreneur to entrepreneur is unlearning the employee mindset.
A solopreneur faces a number of challenges developing and running their business and how fast they learn and change their behaviors can make the difference between success and failure.
10 Common Mental Pitfalls
Here are 10 common mental pitfalls I encounter working with new solopreneurs:
- Strong emotional attachment to the business idea. While optimism is essential in a startup, strong emotions can lead to poor decision-making. Rather than looking for reasons why your idea will work, you should be looking for reasons why it won’t work. The earlier you can figure that out the better.
- No need for outside help. If you haven’t started a business before it’s challenging know what to focus your attention on and not waste time. What really makes this challenging is when new solopreneurs don’t ask for help. A mentor or coach can dramatically increase the odds of a successful startup and save a ton of time and money in the process.
- Running a business is just like a job. A one-person business is certainly easier to start and run than a small team or traditional small business. That said it is still challenging. There are over 20 skill domains a new business owner may encounter in starting a new business. Doing the work of the business is just one of those skills. No one possesses all the business skills either. You might be great with marketing but terrible with bookkeeping. You can be a great problem solver but lack time management skills. Every new business owner wears multiple hats. you have to figure out what skills you have and what skills you need.
- Lack of technical know-how. In my view, the motivation to start a business at square one in the startup process. The next thing that is needed is the ability to produce a product or service. I have worked with people that want to start a business in an area that they have no prior experience. The only way this can work is to somehow outsource the ability to create the product or service. Many solopreneurs will do this. Others will get stuck on this step and can stay that way for months.
- Living in the now. A solopreneur’s planning horizon is usually pretty short, maybe even just a few days. The problem is there’s no real planning going on to guide the developing of the business. This leaves the solopreneur Responding to the day-to-day problems that they care to focus on and the leave the rest. You should at least have a three-month plan with some sort of objectives and measures to help gauge progress. Planning teaches you to anticipate problems and solve them ahead of time.
- Perfectionism. There is no question a high-quality product is essential for successful business. That said, if standards are so high that you are rigid, harsh, and unforgiving to yourself and others then it will be very difficult to get any momentum. Signs include procrastination, being overly cautious, constantly doing things, stressing out to name just a few.
- Numbers are just for tax time. Many first-timers Don’t know if the product or service has a profit built in or how much their overhead is each month. I see so many solopreneurs turn their books over to an accountant at tax time each year and never look at their numbers in between. A profit and loss statements can teach you your revenue and expense patterns and what activities are causing them to go up or down. This is simply not something you can do once a year and expect to survive.
- No idea how to solve cash flow problems. Cash flow means money in and money out of the business, right? That sounds simple but there are a number of challenges to getting the bills paid each month. For example, revenues go up and down (I call it the sawtooth pattern) or the business may not get paid right away. Part of creating a business that is sustainable is solving these cash flow problems. Hard to do if you’re not even paying attention to it.
- Lack of ability to adapt the business strategy. In the pre-venture stage, a solopreneur will come up with some kind of business strategy. It’s typically something simple and easy to follow. The problem is as soon as they try and implement it they’ll discover that parts of it will work while other parts won’t. Instead of adapting the business strategy, they just work harder. That’s employee thinking. You have to treat the first couple of years of business as an experiment. Every day ask yourself what’s working and what’s not and try to learn from that.
- They don’t take time to learn. I’ve seen countless solopreneurs get up in the morning race through the day go to bed at night and do the same thing all over again. They never stop for a moment to what worked and what didn’t. There is no substituting understanding why things work in a business and the only way that’ll happen is if you reflect on it.
Flexibility is Key
These pitfalls occur because new entrepreneurs aren’t prepared for the changes they need to make to their own thinking. Rather than looking at inside to see what assumptions they have wrong, they try to find validation in working harder. This resistance to change makes us our own worst enemy. To be successful means understanding ourselves and our reality and adapting to that reality as needed. That ability to adapt may very well be the difference between success and ultimate failure.