Top Management Mistakes New Small Business Owners Make

Take action to avoid these common pitfalls that could put your leadership in peril.
As a small business owner, too much micromanaging can damage morale and slow down productivity. (Photo: goodluz/Shutterstock)

With the many successes earned from owning a business, you should expect some mistakes along the way.

The learning curve of a small business owner is often laden with lessons learned the hard way, by making errors and enduring the consequences.

Knowing you will most likely suffer missteps, consider taking the advice of Katrina McKay, founder and CEO of Uplevel Solutions and Uplevel PR, and avoid these top five mistakes that many new small business owners make.

You are not clear and communicative about your vision

When they say no one loves your business the way you love your business, they’re not kidding. But, as McKay said, it goes beyond that.

“No one knows your business like you do. As a small business owner, many of your early decisions are based around your passion for your industry and your growing company. These decisions – whether they’ve worked out or not – are not easily comprehensible to your new well-meaning staff.”

If you want your staff to care about your product and service as much as you do, while also delivering the utmost support, then “you need to walk new recruits through the decisions you’ve made – both good and bad – that, in any way, impact what you are asking them to do,” McKay said. “Back this up with a clear, well-articulated vision for your company that makes it easy for your employees to latch on to.”

Not everyone has a contract

One of the biggest mistakes small business owners make is trying to be everyone’s friend rather than a boss or business partner. It might be tempting to seal deals with a handshake, but the legal implications of ineffective protection can be fatal for a new small business.

“If someone touches your company in any way, even as a volunteer, have them sign a contract stating their position in the company and what compensation they are receiving as well as an outline of their responsibilities,” McKay said.

Not only is it useful in the event of a legal problem, but McKay said the contract is also “a reference document in the future to keep everyone on the same page, literally.”

You micromanage too much

It’s well known that the small business owner is among the hardest working people in the business world, but one of the most damaging practices of small business owners is micromanaging. It kills morale and often causes delay and frustration throughout the team.

“Few people like to be managed in this way, and those who do aren’t the types of people you want working for your company in the long run. Your job as ‘the boss’ is to train and motivate your team and help them when they come up short,” McKay said. “If you micromanage your employees, you take away important opportunities for them to grow. Yes, they’ll make mistakes, but if you don’t let go of some control, you will forever being doing everything yourself.”

And wasn’t having more freedom the reason you wanted to be your own boss anyway?

You’re not a team player

As a small business owner, you need to be a leader as well as a collaborator, which often means revealing the good, the bad and the ugly side of your business and your business goals to your employees.

“Most new bosses want to maintain control through control of information. Like they put their employees on a ‘need-to-know’ basis. However, most go too far,” McKay said.
“If you hire an executive assistant, but don’t allow them access to your calendar, how are they supposed to help you? While you don’t need to air all of your company’s dirty laundry, you’re going to have to trust your team or they’re going to be very ineffective. If you hire a marketing manager and you don’t give them access to the financials on past marketing campaigns, you aren’t empowering them to do their job effectively. And if everyone doesn’t have some understanding of where the company is at and where it’s headed, no one can make any decisions on their own.”

You don’t treat your employees as people

When you treat your employees with respect, you not only increase productivity and morale, but you also create a trusting and positive work environment.

“It’s not all about the numbers when you’re managing people,” McKay said. “Your new coordinator has feelings. If you want to nurture a culture of loyalty and respect, start by offering these to your team. To take it a step further, you may wish to call in an expert who deals specifically on empathy. As a new boss, these skills are just as important as your ability to do a SWOT analysis or understand a P/E ratio.”

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