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Four biggest mistakes made by up-and-coming firms

Traps loom in the crucial phase of growth. Avoiding mistakes is crucial for young entrepreneurs

A convincing product, a clever service or hitting the contemporary zeitgeist with a business idea and then business booms, orders start coming, growth increases and success follows. Yet growth is a challenge for entrepreneurs. Christine Frühauf, a Hamburg-based consultant focusing on growth and innovation management as well as interim management, explains the essence of the various growth phases and how to avoid typical mistakes.

First mistake: Refusing to delegate

Those who have set up their own company know it by heart. Nobody knows better how to apply the recipe for success that first put the firm on the growth path. And so everything remains in the founder’s hands. Frühauf said: “That procedure is understandable. However, it soon becomes a limiting factor.” To achieve healthy growth, the entrepreneur must stand back from the operating business. She advises people to “work ON rather than IN” the company. This step distinguishes the founder from the entrepreneur.

Second mistake: Firefighting syndrome

“Young entrepreneurs are good at improvising. But tasks grow massively and become more complex in a growing company. But the flow of information worsens and smaller problems occur repeatedly and are quashed until the next one comes along. “In most cases, there is no time to find solutions for recurring problems.” But that is crucial to becoming professional. “Problems havs to be organised, structures created and responsibilities clarified”, she stressed.

Third mistake: Reluctance to hire personnel

No matter whether the growth was marked by speed or leisureliness, the ground has to be laid for a healthy development. From a certain point, tasks must be delegated and professional structures set up. And Frühauf is certain: “Staff are the most important success factor.” Young entrepreneurs are often scared of hiring personnel as they lack time and are commercially cautious. However, she noted. “You can’t grow without investing in staff.” And the issue has to be tackled early. Finding the right person may take time. But it is a question of keeping an eye on the demand in future and training new staff systematically and helping them to develop further, she added.

Fourth mistake: Inconstancy – growth or slowing down?

The business was built on a business plan; the business idea was phrased clearly and well structured. “But the firm’s further development often lacks clarity”, Frühauf noted. And actually putting visions of growth into words is just as important as regularly examining the business strategy: Where is the money actually being earned? What would bring the company forward? Where do the problems lie? And do I actually want to grow?”

Many successful firms are based on special talents and the founder’s passion for a business. Yet, those who have learnt to delegate often find themselves guiding people who would like to be in his/her position. “That’s why it’s so important to keep checking the size of the company. Once the aim has been decided, you can start deciding which strategies and measures have to be taken. But you should decide on them.”
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Sources and further information:
www.christinefruehauf.de
www.hk24.de

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