As a company focused on working with growth companies and entrepreneurs, we see a lot of amazing ideas. We witness huge wins, and huge losses, and we love that we get to bear witness to the birth of great ideas and great companies.
In this respect, we’ve seen our fair share of mistakes made by well-intentioned founders.
Here’s a few common threads that we’ve noticed along the way;
Founders making the wrong hire
Hey…we’re the first to believe that your referral network is the best network. It’s true. But for critical roles within the organization sometimes the “buddy” from your past simply isn’t the right hire. Hiring critical roles in a growing company is hard work. Make sure you take the necessary time to vet your critical hires. This will help ensure that you make the right choice.
Failure to plan
In the early days of a start-up, success can come quickly. Networks can flourish. Product or solution can be in demand. Hitting $1M can happen..or even more than that.
Making a plan early about how you are going to continue your growth is critical. There is documentation all over the web for growth planning. In fact this article from the Government of Canada addresses just that as a topic.
The point is, you need a plan if you plan to grow. Don’t forget to plan.
Not leveraging best of breed advice
In the hiring of key individuals within your business, don’t underestimate the power of the experienced management consultant. Some key outsource positions could include CFO, CMO, HR or even hiring a consultant to mentor key leaders in your organization. Growth comes with many challenges. Hiring decisions, firing decisions, funding decisions. So many things to consider. There are experienced leaders out there who have seen it all and who are prepared to help you! This has been a key learning for us as outsourced CFO’s & Finance. We have learned that when a company is growing, they will need help. This is exactly why we offer our Outsourced Executives as a part of our business. It just goes hand in hand.
Failing to understand client needs
Early wins predicate the assumption that your offering meets client requirements. But what happens when the “new car smell’ wears off of your solution? Are you spending the time understanding what a client likes about your business? Are you capitalizing on opportunities to up-sell to your client base? More importantly, are you spending enough time with your client? Growing companies often spend a lot of time looking to add new logos and not enough time on the clients they already have.
People want to trust your solution and they need proof points to do so. Taking the time to create fans of your offering and then documenting that for other clients to read is a worthwhile exercise. Articles like this one help us to understand the cost to acquire a new customer versus the cost to retain one make a worthy argument for spending time with your client base.
Here’s a cool article by Forbes highlighting other common pitfalls that entrepreneurs fall into when growing their business.