Wrong Expectation Mistakes:
1. Miscalculate size of market, timing and ease of entry, as well as potential market share.
2. Underestimate financial requirements and timing. Run out of money.
3. Over-project sales volume and timing. Fall short of sales projections.
4. Cost projections too low. Costs are higher than budgeted.
5. Hire too many people and overspend on offices and facilities. Overhead too high.
6. Lack contingency plan for shortfall in expectations.
7. Have too unnecessary partners.
8. Hire for convenience rather than skill requirements.
9. Lack continuous overview of company, manage in parts.
10. Accept “not possible” too easily rather than “find a way”.
11. Too much focus on sales volume and size of company rather than profit.
12. Seek confirmation of one’s actions rather seeking the truth.
13. Lack simplicity-create too complicated business that requires too much talent to execute and manage.
14. Lack clarity of ones long-term aim and business purpose.
15. Lack of focus and identity. Too many directions at once.
16. Lack exit plan and strategy.I reflect on my family business with these mistakes. I realized that we had committed with more than half of the listed mistakes in some extent. The worst mistake out of all was number 12. It blinded us from making right decisions over the years. This mistake cost us almost 1 million Australian dollars.
I hope that you would remember these 16 mistakes when you run your businesses. This list could help you to prevent losing a lot of unnecessary money.
Reference:Sahlman, W.A. 2009, “Dr. John’s Products, Ltd.” Harvard Business School