Once you have a small business up and running, most owners like to think that they are in clear because they are out of the “how to start a business” phase. In fact, this “how to start a business” phase is often focused on the most when starting a small business journey; very few entrepreneurs plan for the mired of mistakes that they will make in the first few years of business. While we’d all like to think we’re destined for quick success, the reality of small business is that failure is far more common than success. though you may eventually find success in business, you’ll likely stumble a time or two prior to enjoying a mountaintop experience.
Research reveals that 90 percent of small businesses eventually fail within a few years. And while there is a myriad of explanations for these collapses – including a lack of market need, a poor business plan, cash flow problems, and stiff competition – many of these factors are directly tied to repeat business mistakes (or an unwillingness to pivot away from mistakes).
Most successful small business owners and/or entrepreneurs understand that they (and others within their organization) are prone to repeat past failures and business mistakes. This understanding is the first step in success. Setting up a detailed business plan, with guidelines and pathways to avoid reliving these blunders is also a key to sustained success and growth.
Here are some specific ways you can avoid repeating past mistakes in the future:
1. Call Out Mistakes
Mistakes need to be called out for what they are. If they’re allowed to be pushed under the table or ignored, then the likelihood of repeating them increases exponentially.
Mistakes shouldn’t be called out with the goal of embarrassing the people behind the error, but rather to prevent them from happening again. When a spotlight is shone on a mistake, there’s an opportunity to understand what went wrong and correct it.
As PinnacleART explains, “Root cause analysis allows facilities to prevent future instances of failure by tracing the root cause of events with safety, health, environmental, reliability or production impacts, rather than simply correcting the proximate or immediate cause of the failure.”
In the aftermath of a mistake, most businesses/entrepreneurs spend their time thinking about the effects of the failure. But it’s the original cause or origin of the business mistake that matters most. Root cause analysis shifts the focus in the right direction and reduces the likelihood of similar issues occurring.
Once you understand why a mistake happened, you shouldn’t run from it. Instead, it’s wise to embrace the friction. By sitting in the pain and discomfort for a while, you train your brain to remember how the mistake made you feel. This emotional response is more palpable than anything else.
2. Hold People Accountable
Business mistakes are much more likely to be repeated when there’s no sense of personal or departmental accountability for outcomes. If you want to lessen repeat mistakes, the best thing you can do is hold people accountable.
When someone messes up, they need to be reprimanded. When someone does something well, they need to be praised and encouraged. Making the commitment to provide real-time feedback will provide a tremendous boost to your small business team.
3. Develop Consistent Routines and Systems
There’s something to be said for creating space for creativity to happen, but you have to be wary. Allowing too much leeway in a variable environment may lead to a situation where your employees and team members may not be prepared for on-the-spot decision-making.
You can avoid many repeat errors by developing standardized routines and systems that enable you to eliminate uncontrollable variables and promote consistency in inputs and outputs. At times, this business plan may seem too clinical and systematic, but this is the best way to limit risk.
4. Keep a Daily Log/Journal
“I like to keep a journal of events throughout my week and when I make a mistake, I like to jot down what happened and how it can be fixed,” explains Ben Landis, co-founder of Fanbase. “From time to time, I go back and reference those notes and see how I have grown. Reminding myself of mistakes from the past allows me to not make them again in the future.”
If you aren’t someone who likes to “journal,” per se, you may still be compelled to keep a daily log where you simply write out bullet point notes of what your day consisted of – good, bad, and ugly. This entrepreneur tactic will cement the ideas into your mind and gives you a chance to come back and review.
5. Extract the Positives
Let’s say you do a project for a client and it ends up flopping. While you would obviously constitute this project a failure, it doesn’t necessarily mean that every individual action you took during the project was bad.
Whenever there is a negative outcome or a mistake made, take the time to extract the positives from the situation. This will give you a better idea of what actually happened and what specific decisions lead to the failure.
6. Brainstorm Alternatives
When going over your past business mistakes, ask yourself the following questions and answer them: what’s something that you could have done differently? Were there other options you could have chosen instead?
There’s a good chance that you’ll encounter a similar situation in the future. By preparing for alternative actions in advance, you can help yourself prevent making the same mistake again.
7. Ask for Outside Input
Most successful entrepreneurs realize that no matter how hard we may try to think freely, we’re all plagued by our own biases and innate cognitive frameworks. As hard as you may try to think in another way, you may unknowingly slip back into the old way of doing things.
To ensure you don’t repeat the same mistakes as a way of similar thinking, ask for outside input. (At the very least, have an independent party review your decision as a system of check and balances.)
8. Jump Back In
It may feel like the best strategy for preventing repeat mistakes is to avoid situations where these mistakes could feasibly happen again. However, this sort of defeatist mentality will actually hurt more than help your small business. If you run from every past mistake, you’ll eventually find yourself tip-toeing around every project, client, and major decision and your business growth will plateau.
The best piece of advice is to jump back into the thick of things and make smarter choices that show you’ve learned from your mistakes. Once you see that you can overcome an issue you previously had, you’ll experience an overwhelming confidence boost.
Don’t let your guard down when you first get out of the “how to start a business” phase, your business still has a lot of hoops to jump through to find success, including making mistakes. Being an entrepreneur or owning a business long enough and you’ll come to find that you’ve made hundreds of mistakes. Some of these mistakes will be serious, while others will be rather inconsequential in the grand scheme things. But remember that every mistake has the potential to be repeated and can cause much worse damage. By familiarizing yourself with how your brain works, you can create boundaries and systems that prevent the likelihood of repeat problems wrecking your small business.