Why Learning From Your Mistakes is Key To Business Success
Business owners are often terrified of making mistakes. They fear the judgement, anxiety, and stakes involved. As a result, they’ll often avoid risk, downplay the error, or be paralyzed by perfectionism. However, what matters most is that a business owner learns from their mistakes, recovers, and adjusts.
As someone who has owned two businesses in completely separate fields, I’ve beaten myself up countless times over mistakes. However, learning from my mistakes has been invaluable to keeping my businesses alive and growing.
This post will cover why mistakes feel dangerous, common errors business owners make, and how you can use your mistakes to thrive in the future.
Let’s dive into:
- Why do mistakes feel dangerous
- Why we can’t avoid making mistakes as a business owner
- 5 common mistakes entrepreneurs and business owners make
- 5 key mistakes I learned from and how I fixed them
- How do mistakes lead to success in your business?
- Next steps for learning from your business mistakes
Why do mistakes feel dangerous
When you’re a business owner, there are three key reasons why mistakes feel so high risk:
First, we fear the judgement and humiliation that often come with making mistakes. We’re worried that people will think we’re incapable or that there is something wrong with us. When we compare ourselves to peers who are successful, these feelings of shame and inadequacy get even worse. As a result, we’re more likely to avoid situations that could result in missteps.
Second, when you own a business, you’re responsible for your income. Add contractors and/or employees to that, and you now have the pressure of making sure other people get paid. You can’t count on an automatic bank deposit every two weeks. You’re the one responsible for making the money show up. When it doesn’t, all eyes turn to you.
Third, entrepreneurs and business owners have high aspirations and expectations of themselves. Every plan of action is aimed at increasing our personal and business success. When we offer an effective solution, our credibility and reputation improve. As a result, we’re more likely to come across potential opportunities that can help us become even better. Mistakes can topple everything we’ve worked hard to build. That makes the fear of failure even stronger.
Why we can’t avoid making mistakes as a business owner
Many business owners struggle with perfectionism. The irony is that owning a business is a learning process that sets you up to make mistakes. Entrepreneurs, especially first-time business owners, produce wrong answers regularly for several reasons:
No one can know everything.
As small business owners, we’re constantly bombarded with messages that we have to know and manage everything. This is even worse in the age of Google and the internet. We believe we should know exactly how to start a business because there’s so much free information available. We’re expected to be experts in our field as well as know everything needed regarding every other field that impacts our bottom line such as finances, taxes, technology, marketing, law, and insurance.
A business owner can’t know everything. Assuming you could is irresponsible. That’s why there are separate programs and degrees for marketing, web development, law, and accounting. As a clinical psychologist, I don’t see every patient. I have a specific specialty. As an SEO consultant, I don’t offer podcast editing services. You probably don’t want to see a cardiologist who also offers root canals. Specialties exist for good reasons.
All of us have biases and blind spots.
We don’t know what we don’t know. We also tend to believe that we’re right and look for information that confirms our beliefs (i.e., confirmation bias). These very natural human traits limit our ability to see every possible risk or solution. As a result, we make decisions based on what we know, see, prefer, and think is best. If all goes well, we get it right. Unfortunately, our biases usually keep us from seeing information that’s often obvious and essential for real and lasting success.
New challenges are guaranteed.
Even if you’ve mastered your current situation, unexpected economic events may force personal growth or result in closing up your shop. No one expected the Great Recession in 2008 or Covid lockdowns in 2020. Yet, businesses of every size all over the world had to deal with brand new problems that needed immediate answers. A tough life experience can be an opportunity to pivot and adapt or stay stuck and fail.
5 common mistakes entrepreneurs and business owners make
As part of the learning process involved in running a business, there are common errors that business owners make. Some of these mistakes are so common, they’re almost expected. A few of the most common errors entrepreneurs make include:
#1 Not putting together a team of advisors.
When people tell you you’re talented and that they love your product and/or service, it’s easy to build up false confidence. Success is an opportunity to hire trusted advisors. Those who don’t get additional guidance and help tend to fall into holes they dug themselves.
#2 Not having enough cash reserves.
Even businesses with money pouring in can go bankrupt. Overspending is common when the bank account balance looks good. Large and unexpected costs, such as a huge tax bill, can shut down a business. If there isn’t enough money to cover unexpected expenses along with the usual bills, success can quickly end.
#3 Being involved in every part of the business for too long.
When we first start a business or it’s still small, we usually have to be involved in everything. Once a business hits a certain size and/or we hit our ceiling, micromanaging often results in major mistakes, lost revenue, and missed opportunities.
#4 Not knowing and understanding the competition.
Many business owners fall in love with their idea and act too soon. They get caught up in the excitement of dreaming and creating without first checking to see what their successful competitors are already offering. As a result, they create a product or service before fully developing a value proposition that will set them apart in a saturated market.
#5 Assuming running a business will be easy.
Non-stop messages about being your own boss result in many people underestimating how hard it is to run a business. Being a subject matter expert is completely different from being a business owner. An expert specializes in solving one type of problem. A successful business owner has to juggle multiple areas of expertise at once. Understanding your strengths and preferences is key to figuring out what kind of business to start and what you need to succeed.
5 key mistakes I learned from and how I fixed them
In the last eight years, I’ve started two businesses. They’re in completely different fields. As a result, I need to come up with a unique approach for each one. While lessons I’ve learned about how to run a business help me with both, I’m constantly working to stay on top of new practices. Businesses have to evolve to stay successful. I don’t love making mistakes but I know they’re unavoidable.
Here are five key mistakes I’ve made as a small business owner, what I’ve learned, and how I’ve fixed them:
#1 Things rarely go as planned.
I love plans. I love detailed, step-by-step plans that should be able to help me make the most of the perfect opportunity. I would be shocked, even devastated, when these plans didn’t succeed. How could hard work plus a logical, well-thought-out plan of action go wrong? I used to assume that a poor outcome meant I wasn’t a good business owner. What I have learned is to expect and respond to the unexpected.
A perfect plan of action doesn’t guarantee success. Instead, I’ve learned that being able to acknowledge a setback, adapt, and pivot is even more important. These are skills you can use to navigate a very wide variety of challenges. A correct solution may not be obvious right from the start. Instead, it may be the result of learning from poor results, hurt feelings, and/or unexpected events.
#2 Respect your health.
I spent most of my life treating my body as if it was the thing that carries my brain around. Regardless of how sick I got, I thought that pushing through was a sign of strength. Our society views burnout and being constantly busy as status symbols. I completely bought into those messages. Then my health crashed in a way I couldn’t deny or ignore anymore.
What I’ve learned is that I have to acknowledge and respect my health. Sometimes, it takes timely feedback from others to bring me back to my senses. I’m wired to keep working. However, when I work myself sick, all aspects of my life suffer. I feel awful, the medical bills go through the roof, I can’t be there for my family, and work has to be postponed or canceled. There’s no glory in any of that. As a result, I’ve set clear boundaries around my schedule and I turn down work when I need to.
#3 I can’t do everything myself.
I used to think I had to know and do everything. My knowledge base had to be constantly updated as if I was some sort of mega computer. The fact that I hated the task or wasn’t qualified didn’t matter. As a business owner, I should be able to know or learn everything. I wasted so much time, energy, and money because of this belief.
What I’ve learned is that I can’t do everything nor do I have to. This means that I don’t need to be a walking, fully updated knowledge base. I can’t take on every potential opportunity. A wrong action is inevitable. As a result of these gaps, I have to ask for help. I’ve learned that my time, money, and effort are better spent when I outsource tasks that I can’t do or handle. I tell my virtual assistant every month that I love paying her bill. She helps save my sanity.
#4 It’s never as easy as the gurus say.
In every field, there are well-known gurus who offer step-by-step programs that are supposed to result in easy success. All you have to do is implement their cookie-cutter approach to your unique circumstances. They emphasize how easily others have succeeded using their exact formula. They position their program as a guarantee of success. That promise is what gets us to hit the purchase button.
Over the years, I have spent thousands of dollars on programs in both the private practice and digital marketing worlds. What I have learned is that nothing is ever as easy as they say it is. There are correct procedures, ethical standards, and guidelines for each field. These must be followed. However, there are always aspects of life and business these programs don’t cover.
You’ll have to figure out challenges unique to your style, life needs, and competitive environment on your own. If you purchase a program, think of it as a tool, not a guarantee. Being a business owner is always difficult. That’s the guarantee.
#5 Set up a business that works for you.
The ultimate mistake is working hard to create a successful business that you hate. So many entrepreneurs create businesses based on what worked for others and/or advice from advisors and customers. They forget or neglect to pay attention to what they need to succeed and maintain that success. As a result, they wind up resenting part or all of their business. I’ve been there. It’s awful to know you feel like this because of your own choices.
Just because a business model or lifestyle works for one business owner, doesn’t mean it’s a good fit for you. Every time I’ve tried to recreate someone else’s business, I’ve fallen short. I started learning about SEO precisely because none of the standard marketing therapists do were working for me!
Being successful requires you have really good insight into how you’re wired, what is a good fit, how much you need to earn, how you do your best work, where you need help, and when to say no. These are things you have to consider when starting a business.
How do mistakes lead to success in your business?
If you believe that mistakes are a sign of failure and that you can’t learn new things, then don’t start a business. In the U.S., 50% of all businesses fail within the first five years. A major reason for this is business owners want to stay in their comfort zone. While there are many steps involved in running a successful business, your overall approach to making mistakes is key to your long-term success.
Entrepreneurs who are successful long-term tend to have a growth mindset. This term was coined by Stanford professor Dr. Carol Dweck. Over 30 years ago, she and her students started researching why some people succeed despite mistakes and setbacks while others don’t. People with a growth mindset believe they can learn new skills.
They know that with time and practice, they’ll eventually master them. Mistakes don’t bother them as much because they view them as an inevitable part of growth and mastery.
Here are three ways you can turn mistakes into valuable business lessons:
Combine good day-to-day management skills with a growth mindset.
Learning, a growth mindset, and putting learning into practice are essential for being able to recover from setbacks, adjust, and move on. Mistakes are a great learning opportunity because you pay more attention when you fall short or even fail. Success doesn’t teach you as much. It usually just reinforces your beliefs in your intelligence and talent.
Learn from other people’s mistakes.
Our society tends to highlight success and make it look like those results happened overnight. Most successful entrepreneurs made thousands of business mistakes over many years to get where they are now. The overnight success is called a unicorn for a reason. It’s so rare, it might as well be a myth.
Learn about mistakes other business owners within and outside your industry made. More importantly, pay attention to what they learned and how they adjusted their goals, expectations, and decisions to move forward.
Their lessons are invaluable because their mistakes and decisions can help you make better choices.
Surround yourself with trusted advisors.
You don’t know what you don’t know. The human brain is wired to look for information that confirms what it believes. That means that biases and blind spots are inevitable. Trusted advisors will provide timely feedback and guidance so that you can make better decisions quicker.
Next steps for learning from your business mistakes
There are so many factors to consider when starting a business. Now that you know mistakes are an inevitable part of the process, you can decide on the next steps. You can choose growth and the unknowns that come with it. You can also decide that mistakes and setbacks make you feel awful and aren’t worth the heartache. It’s okay to try something and decide it’s not for you. This is better than sticking with something that isn’t working.
If you decide to stick with your current business or start a new one, plan on making mistakes. Don’t wait for the right time or perfect opportunity. Neither one of those will prevent you from making mistakes or even failing.
Learning is a long-term investment in yourself as well as your personal and professional happiness. Owning a business isn’t easy. However, if you’re driven to do this, take on the challenges with the courage of a warrior and go for it.
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My name is Ronit (Ro-neet) and I’m a clinical psychologist, private practice director, and SEO consultant. I help therapists, coaches, wellness experts, and health businesses build the success they want and deserve by boosting their online ranking, reputation, and impact. To learn more about me, please check out Simple SEO Systems.