Five Ways You Could Be Killing Your Business

This article was written by Geoff Williams of Entrepreneur.com

Businesses perish in untimely ways, many of which are largely out of an entrepreneur's control: There's too much competition. The public is no longer interested in your product or service. You're a victim of bad luck -- you opened a business on the Gulf Coast a few weeks before Hurricane Katrina hit. Maybe a trusted employee has been cooking the books, or a family crisis is dragging you down.

But sometimes, the painful reality is that a business falls apart for one reason: you. In the end, when any company is suffering, there is a question every entrepreneur must ask when he or she looks in the mirror: Am I killing my own business?

We asked a number of experts for their thoughts on how we most commonly shoot ourselves in the foot. Although there are probably 500 or more methods to murder a multinational or strangle an S corporation in the dead of night, we agree that there are five ways it's most likely to happen.

Micromanaging

As the saying goes, the first step is recognizing you have a problem. Fine, but what are the signs? Margaret Morford, owner and president of The HR Edge, a management consulting firm in Brentwood, Tenn., points to several subtle signs that your micromanaging is out of control. For instance:

• "The people who work for you always present problems or issues, but never offer solutions," Morford says. The employees are probably wondering why they should bother when you always have the solution.

• You have unusually high turnover.

• No one ever turns in a project to you that you don't change in some way. "After a while, people will begin to turn in sloppy work because they know you are going to change it anyway," says Morford.

Rich Enos, co-founder of Boston-based StudySmart, a service that offers one-on-one tutoring for kindergarteners through 12th graders, recognized some of those signs (like high turnover) and soon learned his employees felt micromanaged. When Enos and co-founder Greg Zumas, 31 and 29, respectively, launched StudySmart in 2000, they did everything in the business. Naturally -- they were a start-up with no staff. But long after they added employees, they kept doing everything.

Enos and Zumas feel they've solved their problem of micromanaging by -- you guessed it -- micromanaging how they micromanage. Nowadays, Enos says, StudySmart employees:

• Understand what is expected of them through clearly defined goals;

• receive the training and resources needed to accomplish their goals;

• are given room to work toward those goals;

• report and assess progress toward their goals;

• expect coaching and additional oversight when it looks like performance will fall short of their goals, and recognition and increasing autonomy when goals are achieved.

Their several-step solution might look cumbersome, but if it allows the founders to focus on giving the staff room to work, that's the important thing. It seems to be working: StudySmart's employee retention is up, the company has opened offices in seven cities throughout the United States, and 2006 sales were approximately $3.2 million.

Whatever you do, it takes discipline to stop micromanaging, especially if you've trained your staff to come to you when there's a problem. When that happens, Morford offers an idea: "Every time someone presents you with a problem or issue, ask them, 'What do you think we should do about it?' If you do not like the suggestion, ask this as a follow-up: 'If we did that, what would you do about (fill in the blank here)?' Give them time to think. They will either fix your greatest objection, in which case you should implement their suggestion, or they will offer another one."

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