Seven Stupid Mistakes Made by Small Business Owners - Opinions differ as to what the top seven stupid mistakes are made by small business owners. But one must remember that a business, no matter how large or small, lives or dies by its ability to stay profitable. When a small business owner makes an unwise ch...
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Seven Stupid Mistakes Made by Small Business Owners
Opinions differ as to what the top seven stupid mistakes are made by small business owners. But one must remember that a business, no matter how large or small, lives or dies by its ability to stay profitable. When a small business owner makes an unwise choice it is because he or she is not thinking in terms of profitability and calculated risk. They are taking risks but leaving the calculated part out. Basically this means that the risks the small business owners are making are not well thought out and can have disastrous results on a small business. Here are some common stupid mistakes made by small business owners that reflect unwise decisions at the moment:
1. Doing business with the wrong people. New small business owners are so excited about getting their enterprise started and tend to not want to turn any work away whatsoever. This is a big mistake. All it takes is one customer who picks at everything yet doesn't want to spend a dime to destroy you. When you have a customer that does this, drop this person. Let him or her go to your competitors. It is not worth your time or effort. They will suck the very life from you and your business. They will scream, complain, and threaten but remember, they don't want to spend a dime on anything so they won't hire a lawyer to sue you either.
2. Chasing bad money with good money. What this means is over-investing in some idea or project that is risky. Never put all your efforts and resources into the same project. It is insane. If that project fails, you've lost everything.
3. Not taking the proper security measures. This is where you release products or services without reasonable assurances of payment from your customer. An example of this would be releasing a fully-licensed version of software to your clients without any payment. You are just opening up yourself to having that software stolen and never paid for. Make sure you release software as demo versions until paid for.
4. Not paying your taxes. In the United States, you could go to jail if you do not pay your self-employment taxes and Social Security taxes for your employees if you have any.
5. Letting a customer run your business. Remember that you should never put all of your eggs and resources into one project or customer. But quite often you will get one person who thinks he or she can tell you how you ought to run things and usually these are the ones who have not paid you a dime and will probably be late paying if ever. Take charge of your business and schedule things out. Never let a customer demand you put them first. By the same token, strive to treat everyone with courtesy and respect even if they are difficult.
6. Not having enough money to run the business. Your operational expenses need to be prioritized in your budget. That means creditors have to take a back seat. If you don't have the money to keep running your business it will die. There are monthly operational expenses you have to budget and plan for such as telephones, office supplies, service fees, utilities, and other cost centers. Identify them and plan for them.
7. Being dishonest. Don't tell people you can do things that you know good and well you can't. It will catch up to you in the end and destroy the reputation of your business.
These are just seven mistakes but the list could go on. One mistake not mentioned in the seven but it is the first one small business owners make all the time is failing to have fun. When your small business is no longer fun then you need to see what is wrong. Sometimes it means just taking a day off.
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