Originally published on Entrepreneur Magazine on August 25, 2016.
Entrepreneurs are famous for being hard working hustlers. Goal-oriented innovators. Motivated go-getters. It can be a blessing and curse. You set a goal, and you bust your hump to make it happen. No matter what it takes. Sometimes though, you see a goal almost within reach, and you want it so bad you’d do just about anything… but that “just about anything mentality” could be sabotaging the very business you are trying to grow.
Everyone makes mistakes, particularly when navigating their way as a business owner. The key, of course, is to learn from those mistakes and not repeat them. How many times do you hush that little voice in your head that tells you not to do something? Or ignore that gut feeling you get when something isn’t quite right? Perhaps you’re motivated by the desire to accomplish a revenue or growth goal. Or you just can’t say no.
No matter what the reason, as a business owner you have responsibilities and pressure that compound the necessity to say “Yes” when you should say a stern “No.” Chances are you are guilty of sabotaging your business and you don’t even know it. Or maybe you do know it, and you just can’t help yourself?
Either way, here are the four big business sins that are killing your business:
1. Trading time for money.
There’s a fine line between great customer service and doing something for nothing. Consistently providing more than what’s expected creates an expectation. If you feed this beast, you or your employees are spending time on a non-revenue producing “favors” and stealing time away from other profitable tasks.
It’s cliche I know, but time is money. In “7 Steps You Can Take to Stop Trading Time for Money,” my favorite is number three — “10X the Value of Your Time.” In other words, work smarter not harder. Instead of working with 100 clients that each pay $100, work with 10 clients who each pay $1,000.
Then when you’ve delivered that $1,000 of value stop there. Charge more for the next level of service. Stop giving away your time and expertise for free just because you’re nice, they don’t have the budget, or you’re afraid of losing future business. After all, it is a business.
Instead, of giving away extras after the sale, provide a stellar paid service and charge for anything above and beyond.
2. Conceding to a cash crunch.
Every business goes through cash flow issues. What is important is how you respond to that challenge. I did an interview with Jason Swenk, coach to digital agency owners and we talked about lessons he learned from 15+ years in business.
When it comes to the cash crunch, Jason says “If you want a deal bad enough, you will get a bad deal.” This means don’t act desperate, even if you secretly are. Don’t close a deal if you aren’t certain you can deliver within their timeline or budget. Don’t agree to a sale without a signed contract. Even if you need the revenue.
3. Wishful thinking.
Developing and nurturing relationships in a mutually beneficial fashion is business as usual. But, are you guilty of working with customers that aren’t quite the right fit for you, just to get closer to ones who are? Doing unpaid or pro bono work because you’re sure it will lead to paid work? Are you spending time working with someone other than the decision-maker? Then you are guilty of wishful thinking, which isn’t profit producing.
4. Discounting your value.
I think every business owner has committed this sin at least once. The problem is when you discount prices you are devaluing your product or service. You are inadvertently sending the message that what you’re selling is not worth full price.
I urge you to stop discounting and instead occasionally incentivize a sale. Incentives are a bonus that can be added or taken away at any time but discounting depreciates your value.
So, next time think twice before you ignore that nagging feeling. Don’t just cross your fingers and hope “this time” will be different. It’s not and it won’t be. Make a promise to yourself and stick to it. Jason took these sins to the next level by doing some research with business owners by asking them what self-imposed promises they keep breaking that they will no longer tolerate. Here’s a video Jason made that might inspire and entertain you.
You know when you’re about to do something you’re going to regret. The thing about mistakes is that they give you the potential to better than you were before you made them. Give yourself and your business, the opportunity to be better.