In order to stay positive, entrepreneurs need to lie to themselves a lot. Unfortunately, this can get them into trouble when they have improbable expectations and surprising outcomes as a result.
Below are the 7 biggest lies and the truth about what to do instead:
Sales Will be Better Next Month
Many entrepreneurs believe that sales will always increase in the future. They reason that with more revenue, there will be more profit.
The truth: They don’t change their sales and marketing efforts to give their company a better chance at actually increasing sales. To boost revenue, companies need to be there when customers want to buy. Only a systematic sales and marketing effort will accomplish this.
The Next Big Customer (or Product or Employee) Will Change Your Company Forever
The belief is that the next big break will take their company to the next level.
The truth: Progress in companies typically builds slowly and success doesn’t usually have a tipping point. Think about the essential building blocks that will grow the company step by step.
Big Money Means Taking Big Risks
They read the urban folklore of the few who took big risks and made billions.
The truth: Most people fail. The success in business comes from taking small steps, evaluating the results, and taking the next action.
Competitors Are Slow
Many entrepreneurs think that their competitors are not innovative and can’t react quickly. Tell that to Blockbuster and Borders.
The truth: There will always be a competitor developing a better mousetrap. The entrepreneur needs to know what their competitive advantage will be when that day comes.
Keeping the Financials in Your Head is Okay
Many entrepreneurs believe that they do not need to review their company financial statements.
The truth: Most of the time their expectations do not match what is actually going on. This is why it’s important to read and understand these statements every month.
Getting Paid Last in Your Business is Acceptable
They reason that they are investing in their company and this is how they justify living off of savings while running a start up.
The truth: If an entrepreneur does not draw a livable wage from their company, they have a hobby, not a business. Always include the owner’s salary in the monthly budget.
Being Busy Means Being Productive
Many entrepreneurs believe if they are busy at work – then they must be adding to the value of the company.
The truth: With all the distractions and interruptions that can enter an entrepreneur’s daily life, they need to be very disciplined that they focus on projects that will make a deep impact on the company. Pick the two things that need to get done today and complete them before starting any other task.
What lies do you tell yourself?
Republished by permission. Originally published at Nextiva.
Deceiving Yourself Photo via Shutterstock
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Great list, and I particularly like the one about competitors. I love watching Shark Tank and on the show many of the companies don’t have an accurate picture of the competition. This lack of competitor knowledge (paired with an investor who knows of competitors they don’t know about) casts them in a negative light and hurts their offer(s) or means they don’t get an investment at all.
I remember I was once in a presentation where I asked the entrepreneur what their competitive advantage was and he said that all his competitors were stupid! 🙁
It’s easy to assume that you’re on top of your game and there’s really nothing to be afraid of in your competition. But knowledge is the only thing you can depend on in this area. Trying to guess it is futile.
Thanks for the article Barry, I think my favorite of the one’s you mentioned is about competitors not being innovative and acting quickly. I have seen a lot of business people that think that they don’t have to get better or change because their competitors haven’t yet.
Great article Barry. I sometimes tell myself I don’t have any “real” competitors because what I do is so unique. Ha! Good one. This is a good kick in the face. Thanks!
If you have no competitors, you have no business.
Great Information: Guilty as charged.. on a few of your points. Working with technology I found out is not that simple and the sales process does in most cases take longer then what was originally and carefully planned. The reason is that when you are involved with innovative and game changing technology, it just takes a while to educate your potential customers. If I would have known what I know now, I would have done things different in the beginning.
Great article. Sometimes I’ve seen entrepreneurs think too much about competition. 🙂
Neither fear nor underestimate your competition!
Hey Barry, this in all sense speaks about reality. Business owners tend to be ideal forgetting that sometimes some things just won’t really happen, even in an instant. Thanks for citing the truths behind those ideals.
That busy/productive one is too relevant to, well, everything… it’s a common delusion if there is one!
Great article thanks for the post. I think most entrepenours tend to delude themselves about the success or future of their business, especially if its all going downhill. People just dont want to see their creation sink like that.
Your financials need to be tracked on paper, by a bookkeeping system, or both. Not being able to “see” where your money is coming from and going to can cause major rifts in your cash flow. Plus tracking your financials monthly allow you to discover trends and opportunities and create better budgets and as result.