12 Common MISTAKES Entrepreneurs Make With EMPLOYEES and How To Avoid Them

12 Common Mistakes Entrepreneurs Make With Employees and How To Avoid Them has been written based upon my experience of being an employee and an entrepreneur.  See I had business while still working. Entrepreneurs need advice.  They need to know what they are doing wrong and well as right.  I hope you enjoy this episode.

Hi fellow entrepreneurs, and welcome to the channel.  I am so happy that you joined me today.  I am taking a break from our cost accounting series today to discuss the 12 common mistakes entrepreneurs make with employees and how to avoid them.  Let’s face it, we all make mistakes.  The key is to learn from our mistakes.  I am going to be using the tale of two entrepreneurs throughout our video today.  I want you to think about the management style of each entrepreneur.  Try to identify the mistake that the entrepreneur is making.  The first mistake is failing to connect with the Team.

Failing to Connect with the Team

Entrepreneur #1 would come in each morning and walk to your desk and talk to you for a few minutes.  He did this to every employee.  He would ask questions about the family and shown interest in you outside of being an employee. 

The second entrepreneur would come into the office and never stopped by to visit with the employees.  He would only interact if he wanted them to do something.  Which always meant that he had a special project for you to do.  Which entrepreneur would you want to work for?   

Hopefully, you selected the first entrepreneur.  The first entrepreneur is connecting with his team.  He is showing interest in them outside of the workplace. The second entrepreneur was not connecting with his team.  Managing projects through email and task management has made it easy for entrepreneurs to control teams without physically interacting with them.  However, this is a bad idea.  Showing your employees that you care is essential to building trust.  It reflects that you value them.  You are concerned about them as more than just employee. 

Take a few minutes to talk to your employees each day.

Taking a few minutes each day to talk to your employees helps keep them motivated and helps you understand them as individuals.  This allows you to identify what motivates them, their values and what drives them.  If you do not understand what makes your employees tick, then you are going to struggle with motivation and morale problems.

A quick daily “check-in” meeting helps entrepreneurs and employees share successes, discuss problems and build relationships.  One-on-one weekly meetings offers entrepreneurs opportunities to build relationships with employees while providing and receiving feedback.  This can be easily accomplished remotely if needed.

Never tell me you do not have time for this.  Your employees are the face of your business.  They represent your business to your clients.  Understanding your employees is the first step in motivating them.   The better motivated they are the better service you will provide to your clients.    After all it only takes a few minutes to check-in with your employees.  This can be easily accomplished at the start of each day or at least once per week.  Next mistake is getting to chummy with employees.

Getting too Chummy

Again, I will use the tale of two entrepreneurs as examples.  The first entrepreneur never went to lunch with the employees unless it was a work-related function.  He would always go to lunch alone.  Usually, he went to work related meetings with potential clients.

The second entrepreneur always went to lunch with the same employees every day.  In fact, they would go to lunch and never return on time.  It was always an extended lunch.  When this was brought up the entrepreneur said that he was discussing work with them.  However, it was later learned that the work being discussed was not in the job descriptions of those present at lunch. 

Not Including the Right People

In other words, the entrepreneur was discussing things with his favorite employees that pertain to those that were not present at lunch. In fact, the entrepreneur would ask for status updates on projects that the employees not present at lunch had no idea about.  The other employees would fill in those employees not present.   As you can imagine the resentment and trust issues this behavior caused?    Which entrepreneur would you want to work for? Better yet, which entrepreneur would you want to emulate?  Can you see the problems that could develop when the second entrepreneur only went to lunch with is favorites?  Behaving like this can destroy employees. Friendships can easily undermine your authority just to name a few problems. 

It is your responsibility as the boss to ensure that you think how your behavior may be perceived by those around you. Now on to the next mistake not listening to your employees.

Not Listening to Employees

The next mistake is one of the most common mistakes that entrepreneurs make.  Again, I will be using the tale of the two entrepreneurs.  The First entrepreneur has a new project that needs to be done.  He gathers a group of employees best suited to perform the project.  Then he asks the for their input on the project and any potential issues that may arise.  Next, he checks to ensure that the proposed completion schedule with not conflict with the other projects that the employees are working on.

The second entrepreneur also wants the same project completed.  He gathers the person that he knows will get the job done.  He does not even ask for their input just tells them what to do.  The result is a failed project.  He did not consider all the other projects the employee was working on.  Also, he did not specify how soon the project needed to be completed.  Furthermore, the entrepreneur did not think out the project fully and it lacked important details.  In addition, the individual assigned to the project did not have all the skills needed.  The employee also had to ask for clarification numerous times.   

Project Failed

Because the second entrepreneur did not listen to the employee when he said his schedule was full.  This forced the employee to rush through the project resulting in a haphazard completed job. Also, the employee told the entrepreneur that he did not have the needed skills to pull off the job.  As you can image the employee was frustrated and his moral was down.  If entrepreneur number two had done the following the project would have been a success:

Remember, that your employees may have been able to bring up ideas to enhance the project plus discuss any obstacles that may hinder the project.  It is easier to achieve buy in by bringing the employees in during the initial phase of the project.  Remember, that as an entrepreneur you need to be focused, and listen to the important information provided by your employees.  The next mistake to discuss is micromanaging.


Again, I will use the tale of two entrepreneurs.  The first entrepreneur demanded that every step the employee did was reviewed by him.  The employee would make suggestions, but the entrepreneur would not listen and insisted that the employee follow his steps exactly.  If the employee failed to follow those steps he would criticize the employee.  The result was that the employee lost motivation. The employee felt that the entrepreneur did not trust him to do the job. Also, the employee did not feel like a valued member of the company. Eventually, the employee left the company and the entrepreneur was upset about the amount of time that he put into training the person. 

The second entrepreneur outlined what needed to be done but let the employee determine the steps necessary to accomplish the task.  This allowed the employee to grow and feel part of the team.  Micromanaging destroys employees and teams.  I can tell you firsthand that no employee wants to be micromanaged.  As an entrepreneur you need to trust that you employees will perform their work and get the job done.  Yes, you follow up and review the work when needed.  However, micromanaging destroys employees.  There is a difference from mentoring to micromanaging your employees.  Remember there is more than one way to achieve the task. You need to let the employees experience problems and solve the problems themselves.  This allows the employees to grow. Solving the problems for them does nothing to help your employees and takes time away from you doing other tasks that need your attention.

Now on to the next mistake reacting instead of planning.

Reacting instead of planning

Another common mistake is reacting instead of planning. As I said earlier in the video you cannot solve every problem that your employee faces.  Your employees will not develop the skills needed to resolve the problems and you risk burn out because you feel that you need to solve every problem.

Instead of reacting you should take the time to anticipate possible problems and resolve them before they start.  You can then help employees develop their own crises resolving skills.  The only time you really should be involved once your employee is trained is to handle the most serious of setbacks.

Example:  When I worked in IT, I had the power supply in our server go down.  I went to the senior executive and told him I needed to go get the part.  He asked how much the part was going to cost and how long before I could get the server back online.  I told him in under three hours and the part cost about $100.  He told me to get it done.  Afterwards, the senior executive told me he was happy how I resolved the issue.  He said always come to him knowing the cost to fix something and the downtime involved.  I did just that.

The next mistakes are going power crazy.

Going power crazy

Power crazy entrepreneurs.  Yes, it is a real thing.  They tend to go on power trips.  I have seen many in my government career.  The boss will tell you it is “my way or the highway” mentality or who refuses to own his own mistakes.  I have seen entrepreneurs with the same attitude.  You consult with them and provide advice only to have them say “No, I have done it this way for years.” 

We Always Have Done it This Way!!!

Well, let me tell you that this can quickly ruin an employee’s motivation and morale.  I cannot tell you how many times I have been told that we have done it this way for 30 years and are not going to change now.  There are better and faster ways of doing things.  And sometimes an old dog can learn new tricks.  Let your employees try something new.  Let them fail.  Do you know what failing is?  It is learning.  After all, many entrepreneurs have failed at a number of businesses until they find the one that succeeds.  When you fail at something you learn a valuable lesson.  Lastly, take responsibility for your failures.


There was a mentor that kept telling his clients that they did not to buy any accounting software that they could do all the accounting tasks by hand.  When I heard this, I was blow away.  No way, I said.  I could not image doing my accounting by hand.  This is an example of someone that has done something the same way for his whole life and was not willing to learn something new.  Just because it worked 30 years ago does not mean it is the way to do it today.  Now on to the next mistake of ill-defined goals.

Ill-defined goals

Next up is not having a clear understanding of your goals. Or better yet, failing to communicate a clear understanding of your goals to your employees.  After all, when employees do not understand what they are working for it leads to confusion and stress. The best thing you can do for your employees is to set individual priorities for them based upon how each employee contributes to your goals.  Also, don’t forget to remind your employees why those goals are important.  When developing your goals bring in your key employees and let them help with the process.  This will result in employee buy in.

It boils down to properly defining your goals and proper communication.

Not Communicating Successes with Your Employees

I can tell you that the biggest mistake you can make is not communicating with your employees.  I bet you are great at communicating the failures that your employees did but when was the last time that you told them they did a great job? 

Back when I was an employee, my boss had me write my yearly accomplishments for his review.  He never once told me I did a great job by exceeding my goals.  In fact, it usually resulted in more work being piled on me which resulted in longer hours at work.  It was very frustrating not being appreciated for all the work I did.  Especially, when there were others that were not performing to the same standards. 

Emotional managing

Keeping your emotions in check is an important trait to develop your employees.  This is especially important when everything around you seems to be falling apart.  Your employees will look to you for support and guidance.

What attitude and environment do you want to cultivate within your company?  Developing your emotional intelligence helps you entrepreneur your emotions so you can remain calm and positive during a crisis.  This can be especially hard at times but is a necessity.  Up next, is money is not a motivator.

 Money is not motivation

Many entrepreneurs believe that money is the key motivating factor for employees.  But it is a mistake to assume that money is the only motivator.  There are multiple factors that motivate employees.  Improvements in their work/life balance, recognition for a job well done, increased responsibilities or a chance to develop a new skill can often motivate employees more than financial incentives.

It is in your best interest to determine what motivates each employee.  A lot of times a quick chat in the hallway to thank an employee for a job well done makes more of an impression than financial rewards.

I can tell you that I loved to learn new things at work.  A lot of times I would volunteer to run other programs just so I could learn new skills.  I believe it made me a better employee and entrepreneur.  I still practice this today.  Now on to the next mistake of failing to provide feedback.

Failure to provide feedback To Employees

The biggest mistake employers make is failure to provide feedback.  Yes, it can be difficult to provide constructive feedback to employees, but it is absolutely vital for employee development.  Remember it is not about criticizing the employee but offering ways the employee can improve.  Let them know what they are doing well also.  Make sure to offer solutions to help your employee improve performance.  Also communicate clearly to ensure employees understand how they can improve.

If an employee is needs training that is offer locally consider paying for that training.  It can be extremely helpful to the employee and you will reap the benefits later on.

Remember that this feedback is not a one-way street.  Listen to your employee’s criticism, evaluate it and make changes if the feedback is valid. An excellent entrepreneur will ask employees for suggestions on improvement.  Now on to the last mistake failure to grow.

Failure to grow

It is your job as an entrepreneur to ensure that each employee reaches his or her full potential.  This also includes developing your own full potential.  Look for areas that you need to improve and develop them.    The better developed you and your employees are the better your business can perform. 

In Summary Employees Are Key

We have finally reached the end of the 12 mistakes that entrepreneurs make with employees and how to avoid them.  Remember the better trained your employees are the better they will represent your company. 

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