And how to apply them to your business
Chances are you have read plenty of helpful hits and success stories about how to run a business. Yet what about mistakes to avoid? Each of these six missteps is common, yet preventable:
1. Going it alone. It’s best to include at least three other people in your key decision-making: an attorney, a CPA, and a financial advisor or banker.
2. Wearing all the hats. Responsibilities such as bookkeeping, taxes, and payroll take up time you could spend serving customers. Hiring a professional also helps prevent errors and shifts much of the risk to someone else.
3. Keeping your head down. Business owners need to seek wisdom in the wider world. Whether your quest for knowledge includes online research, trade shows, Chamber meetings, or networking with peers, it’s a vital investment to make.
4. Running lean on cash. Small businesses need at least three months of cash flow in reserve for seasonal fluctuations or a dry spell. Putting cash away monthly can help, and so can a line of credit.
5. Avoiding credit applications. Applying for credit before you actually need it, tapping your credit regularly and repaying promptly, will help you build a solid credit history and a source of ready cash when you do need it.
6. Combining accounts. Co-mingling your business and personal accounts makes it nearly impossible to get a sense of your business cash flow, do your company’s taxes, track business expenses and build a credit history for your business.
To avoid these and other pitfalls make sure you are following business practices that will keep your business headed toward success.