While you may have launched a powerful new product that promises to change the market, you will not get far if you make these three common mistakes. First, your business has not bought enough brain power. Second, your business does not have enough social capital. Third, your business does not have enough knowledge and skills.
While it doesn’t hurt to be well funded, have the right infrastructure, and impeccably perfect timing, you won’t get far on these alone.
Let’s take a look at why brain power, social capital, and knowledge and skills are so important for your success.
- Buy Enough Brain Power
While working for yourself and by yourself is rewarding, once you grow you can’t do it all. However, hiring the right people is often underestimated. Instead, to conserve funds, a startup might hire interns, who get little or no pay, and outsource much of the work.
It’s much better to hire the right core team from the beginning, and have the right processes in place to sign them up fast. CudaSign.com offers a way to get legally binding electronic signatures from top candidates before they go elsewhere. You can sign them up on any device to seal the deal quickly.
While there is nothing wrong with hiring interns or outsourcing, these are more useful once your company has matured a little. In the beginning, interns have too little to contribute and outsourcers will not be as engaged as people onboard.
The reason new business owners may be reluctant to hire top talent from the beginning is for one of two reasons. They either don’t have enough money or they want to conserve the funds they have for other purposes.
If you don’t have enough money, you might be able to arrange to pay top talent a percentage of your profits. And if you do have enough money, the best place to spend it would be on getting the right people.
The best way to appreciate the value of not hiring the right people is by looking at what happens when you hire the wrong people. The wrong people either lack the knowledge and skills to push your enterprise forward or do as little as possible to stay employable.
Contrast that with a group of bright, knowledgeable, and enthusiastic people who work as a team to push your enterprise forward. The wrong people, conversely, will not help your company get the momentum it needs to grow at a rapid rate.
So buy as much of the right brain power in the beginning rather than later on in the game. It will give you a winning edge.
- Build Social Capital
When most people think of funding their business, they think of monetary capital. This is the money that they need to buy the infrastructure and resources to build wealth. But they will make even more progress if they also build social capital.
Social capital is accumulating resources like referrals, contacts, opportunities, information, and ideas. These come from a network of personal and professional contacts.
It is much more difficult to build social capital than monetary capital. To get monetary capital, you just ask for the money you need from an investor and offer plenty of proof that it will be used well and bring in a handsome ROI.
But to build social capital, you need to do the following things:
- Spend time joining associations, going to meet ups, and participating in industry conferences.
- Work as intently on word-of-mouth marketing as the rest of your marketing.
- Offer referrals yourself to build goodwill and help complementary businesses succeed as well.
In other words, do what you can when you can to increase your contact network. To be referable you have to do simple things like:
- Be dependable.
- Deliver on time.
- Keep appointments.
- Treat others with courtesy.
- Avoid gossiping.
The more you can do to build a professional reputation, the faster your social capital will grow.
- Acquire Knowledge and Skills
We live in an information age and the more knowledge and skills circulating through your organization, the faster it will grow.
In a hierarchical system, a few people know what is going on and tell others what to do. This model is now changing because business and technology are becoming far too complex for a few individuals to master. Now, it’s all about collaboration – between project members, project teams, and even outside partners.
It’s better to diffuse knowledge throughout your organization than to have it concentrated. For this to happen, you need to create ongoing training programs. You need to keep everyone up-to-date on the latest breakthroughs in their specialty.
Why These Mistakes Are Common
The reason entrepreneurs make these mistakes is because they are inconvenient steps to take. It’s inconvenient to spend the lion’s share of your capital on payroll. It’s inconvenient to take the time away from your business to develop social capital. And it’s inconvenient to organize training and development as part of the organization. Yet your biggest growth opportunity always appears to hide in your greatest challenges.