Beware: Fatal Entrepreneur Mistakes You Can Avoid

Some mistakes are difficult to overcome.

We’d like to think if we can work hard, solve a customer problem- and have an ounce of luck- then our business will succeed. Alas, this might not be the case. Despite all of our efforts, there are some issues that slow down our journey towards success- or stop it all altogether.

In many cases, these mistakes might be entirely innocent; you may think that you’re doing the right thing, only to discover later that it was the wrong thing after all. Here are some common entrepreneur mistakes that can cause big problems for your business.

Is Growth Good?

You started a business, in part, to grow sales and increase earnings. Growing your company validates your business idea, and generates excitement for everyone in the organization.

Not all growth is good, because growing too quickly can lead to problems.

While rapid growth might sound appealing, it means needing more resources, more logistical planning, and more cash. If you’re not in a position to handle these aspects – and if you’ve grown quickly then you won’t be – then you might end up in difficulties you never saw coming.

Many companies produce a profit, but can’t generate cash inflows fast enough to operate and manage growth. If, for example, you manage a retail shop and increase sales by $200,000, you’ll need to buy inventory to fill an additional $200,000 in customer orders.

Growth requires more cash. If you can’t generate cash quickly enough, you may have to borrow money, or bring in an investor’s cash.

Not all growth is good.

Too Slowly

On the other hand, there’s also the issue of not growing quickly enough. You have to take chances when you’re in business. If you’re not willing to do so, then you’re probably in the wrong game! Some entrepreneurs try to have every aspect of their operations watertight and running smoothly before they think about expanding.

Get free sample chapters from my book: Not Another Personal Finance Book.

By the time they’re ready to make the jump, it’s too late. While you should always ensure that your core operations are performing well, don’t be afraid to test new waters.

Growth will require you to do things that are new and different.

Big Mistakes

Most entrepreneurs start their business life with nothing but an idea and a bundle of energy. Alas, there’s much more to business than those two important things!

There’s a lot of logistical hoops and legal procedures that you must follow. If you don’t follow these rules, then you may be accused of various white-collar crimes, even if your mistakes were accidental rather than malicious. If that happens, contact a law firm like Martin & Kent, LLC, and fight your corner. While it won’t be a pleasant experience having to focus on the law rather than your business, at least you can minimize the threat to your company.

Culture

Entrepreneurs rightly focus a lot of their energy on their company culture when they’re just starting out. But then, as the ball gets rolling and picks up speed, other priorities present themselves, and maintaining the company culture takes a back seat.

Once it’s gone, a great culture is hard to get back! So don’t let the standards slip, because you may lose valuable staff, and that will be a setback for your growth plans.

Controversy

Finally, the big one: controversy! In this digital age, a controversial promotion or social media gaffe can lead to serious problems that don’t go away. Stay careful, don’t rock the boat, and work to minimize any scandal as soon as it arrives.

Keep these ideas in mind, and you can grow your business and avoid bid mistakes.

This post is for educational purposes only.

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

Co-Founder: accountinged.com

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/

(you tube channel) kenboydstl

 

Image: Bullseye, Jeff Turner CC by 2.0