Knowing what to avoid as a small business owner can be as important as knowing what you should do. Too often, new owners make avoidable mistakes.
Underestimating Your Needs
As a small business, your needs are often very different from those of a much larger company. However, this is not always the case. Sometimes you have complex areas that require the same types of tools that larger businesses use.
For example, consider that your business owns a small fleet. Even just four or five vehicles can be time-consuming to track when you need to stay on top of safety, cost, compliance, and delivery times. GPS fleet tracking makes this much easier for you, and you can review and learn how it can simplify your operations at any scale.
Skipping Contracts and Other Formalities
Maybe it feels strange to draw up contracts when you’re a one-person operation or a small business, but it would be a mistake not to. Contracts have significant value beyond protecting you and the person you agree with.
They signal to others that you are professional. They clearly state the terms of the agreement so there is no confusion or dispute later about what may have been in a verbal agreement. Don’t get stuck on the idea that a contract somehow suggests that your word, or someone else’s, is not enough. Even the best-intentioned people can interpret an agreement differently.
Not Getting Expert Advice
Speaking of contracts, don’t try to draw them up yourself. This is one of several areas where paying for a few hours of a lawyer’s time can save you a lot more time, money, and heartache in the long run.
There’s also a value in working with an attorney on lower-stakes things such as contracts and business registration because you have a regular contact to turn to if you are facing a lawsuit or other issues.
Yes, a small business needs to be frugal, tracking where every dollar goes, but beware of false economies.
Other areas where it can be essential to seek expert advice are financial matters and tech matters, particularly computer security. You don’t want the moment that you learn that your security precautions are inadequate to be when your customer data is stolen.
Likewise, you don’t want to find out you haven’t been keeping your books properly when you get hit with a hefty IRS penalty.
Hiring experts doesn’t absolve you from knowing what’s going on under your roof, and there are things to look for when selecting the right professional. Still, it can provide you with an additional measure of safety when it comes to areas outside your wheelhouse.
Not Valuing People
Let the people around you who are helping you build your business know how much you value them. This is one of the most common habits of successful people and deserves a great deal of attention.
This includes the experts discussed above but extends to employees, mentors, business contacts, and friends and family members who support you along the way. No one succeeds entirely on their own, and it is crucial not to burn your bridges.
Showing your appreciation will mean different things to different people; for outside experts that you are paying, simply being professional and thanking them for their time is sufficient. However, employees, friends, and family members should get more tangible rewards or appreciation.
For example, you can’t constantly tell your employees how great you think they are but pay them well under market value. You’ll end up with unmotivated staff and eventually struggle with retention.
Similarly, if your spouse is home wrangling the kids and the house while you’re running the business, you need to make sure that you set aside some quality time to spend with the family. This downtime is also valuable in terms of preventing burnout.
Greg is a Chartered Financial Analyst (CFA) with 22+ years experience in Financial Services. He has held numerous FINRA Securities licenses (series 7, 63, 65, and 66), and is an expert on Investment Products and Financial Planning. Greg has 22+ years experience as a real estate investor and degrees in Psychology and Philosophy.
Greg has been quoted/interviewed in Yahoo Money, Yahoo Finance, USA Today, Authority Magazine, Realtor.com, Business Insider, and others.
Greg is an avid runner, and the father to identical twin girls and their awesome brother. His love of budgeting and his kids led him to join The Great Resignation in 2021.
Disclaimer: Any Financial Tips on ChaChingQueen are general and informational. Speak with a professional about your specific situation.