Being successful in business is a delicate juggling act of 
doing the right thing while simultaneously avoiding costly 
mistakes.  

Unfortunately, many small business owners--especially new 
business owners-- make simple mistakes that could easily be 
avoided with a little diligence and some inside knowledge.  

Here's a list of ten of the more common errors I've observed 
during my years working with small business owners:  


1. THEY UNDERCHARGE 

When first starting out, many business owners tend to 
undercharge for what they sell. There are two reasons for 
this. 

First, they don't know how to correctly set an effective 
price, and second they think they need to have the lowest 
price in order to get business. 

Both circumstances result in low profits and poor 
cash flow. These "bad habits" frequently continue even 
after the business has gone through its start-up phase.  

In order to survive in business, it's crucial that a 
business owner receive maximum reward for his or her
efforts. 

>From my experience, many small business owners would easily 
survive--and be much better off financially--with a well 
thought out and properly implemented price increase.  


2. THEY CONCENTRATE EXCLUSIVELY ON SALES 

When first starting out or having a background in marketing, 
many business owners and self-employed individuals see only 
one line on their profit-and-loss statement: SALES! 

They think the more sales they have, the bigger and 
better their business will be.  

Nothing could be further from the truth! 

While no one can deny the benefits of having a boatload of 
business, focusing exclusively on sales is oftentimes a 
recipe for disaster. A "more sales only" mentality and 
growing too quickly are classic examples of how a business 
can fail during its peak growth phase. 

Believe me, it happens.

Running and operating a successful business doesn't require 
exceptional talent, but it does require vital and basic 
business skills covering a wide range of areas. 

To succeed in business you must focus on your WHOLE business, 
not just parts of it.  


3. THEY EXTEND CREDIT TOO EASILY 

In an effort to increase revenues and grow rapidly, many 
business owners extend credit to customers who pay late, or 
worse, never pay at all.  

While nearly all businesses have their share of late or 
uncollectible accounts, it's important to minimize bad debts 
and slow paying customers by reviewing credit policies and 
picking and choosing customers wisely.  

If selling on credit, be sure to perform credit checks on all 
of your customers. Also, make sure your customers completely 
understand and agree to your payment terms BEFORE doing 
business with them. Many slow paying customers like to take 
advantage of ambiguities in payment policies.

While it may be attractive to take on as much business as 
possible--especially when bills need to get paid--keep in 
mind that it's better to have no business than to give away 
free business. 


4. THEY THINK ABOUT TAXES AFTER THE YEAR IS OVER

Taxes are a subject many owners put off until the last 
minute. This procrastination costs money in the form of 
paying more tax than is required.  

One of the reasons business owners fail in their tax 
strategies--besides not having any--is because they neglect 
to seek knowledge and advice BEFORE they engage in any 
activity that has a taxable effect.
  
If you're serious about saving money on taxes, learn to 
consider tax ramifications BEFORE you act. Planning is the 
key to reducing the amount of taxes you pay each year.  

Since taxes represent a large expense in any business, it's 
absolutely essential that you do everything possible to 
minimize the cost. This means getting a grip on your taxes 
BEFORE and DURING the tax year, not after.  


5. THEY DON'T HAVE A PLAN OF ATTACK

You've heard the saying, "If you fail to plan, you plan to 
fail."  

It amazes me how many business owners and self-employed 
individuals don't have clear, concise and written goals. And 
the goals they do have are frequently vague and imprecise.  

Would a homebuilder build a house without a blueprint? 

Certainly not.  

Then why build a business without one?

If you don't have some idea of the overall picture or end 
result, your efforts will be average at best. Its not that 
average is necessarily a bad thing; it's just that I feel 
many owners are capable of even greater success. More than 
they originally imagine.  


6. THEY DON'T KNOW HOW TO HIRE AND KEEP GOOD EMPLOYEES

A common problem business owners have is their inability to 
effectively manage their employees. Not only do they make 
hiring mistakes, but they also don't know how to keep good 
workers.  

Besides the owner, a good employee can be a company's most 
valuable asset. In fact, in a small business employees can 
actually make or break the business. That's why it's 
essential that you hire the right person for the job. 

When hiring an employee, think real hard about whom it is 
that you're actually hiring. An employee's lifestyle is 
definitely going to affect their performance on the job.  

Likewise, if you want to keep good employees, be sure you 
have a system in place that rewards their efforts. 


7. THEY DON'T PROVIDE OUTSTANDING CUSTOMER SERVICE

The fact is any business can provide good customer service. 
But if you want to build a highly successful business, make 
sure your customer service is "beyond industry standards".  

While numerous factors are responsible for success, by far 
the easiest way to expand your business is to provide 
customers with customer service that is "beyond industry 
Standards". Doing so is like planting money seeds that will 
grow and yield basketfuls of profit. 

Sadly, many business owners don't provide the level of 
service that is frequently the difference between mediocrity 
and success. 


8. THEY'RE ECONOMICALLY DEPENDENT ON A SMALL GROUP OF 
CUSTOMERS 

The easiest way to give away financial control of your 
company is to grow your business on a small group of 
customers. While this may look tempting and free of hassles 
at first, relying on a small group of customers is not a 
good thing and it should be avoided at all costs.  

Unfortunately, many business owners did just that and paid 
the price for it when the customers stopped doing business 
with them.  


9. THEY LET EMOTIONS GET IN THE WAY OF SOUND BUSINESS 
DECISIONS 

Some people get consumed with their emotions and frequently 
make business decisions for the wrong reasons.  

Examples of this include spending money on sexy, expensive 
advertising just to boast or beat their chest. Other 
examples include keeping unproductive employees because 
they feel sorry for them, or going out and spending crucial 
capital on equipment that isn't needed yet.  

To make good decisions, make sure you rely on the facts and 
sound business judgment.  


10. THEY FAIL TO DEVELOP AS LEADERS AND MANAGERS

Many business owners limit the amount of success they attain 
by failing to continue learning. As I said earlier, running 
and managing a successful business doesn't require 
exceptional talent, but it does require basic business 
knowledge. Without this knowledge you're at a substantial 
disadvantage.  

You should do everything possible to learn whatever you can 
about the complexities and nuances of your industry or 
profession--and not just once, but regularly.  

Of the many things I've learned from highly successful 
business owners, one thing stands out: they never quit 
learning about their business.