These are the Most Common and Preventable Mistakes Small Businesses Make – and How to Avoid them.

These are some things your small business can do to avoid future problems.

Every week, I have the chance to work with small business owners in many ways. Sometimes, they find themselves in a situation they don’t have to face. One area where many business owners need help is in accessing working capital due to their poor credit history. Another example is when I help a business owner to get out of debt from a hard-money lender.

These are two prime examples of situations that could easily have been avoided if the business owner had done a better job getting their credit in order. What are the current issues you face that you could have avoided if you had done more research?

These are some ways to ensure you can take steps today to limit tomorrow’s challenges.

1. Credit/Finance

The bottom line is what small business owners look at — what they brought in this, last, and what’s next month. They also think about the future. Next year, following 3 to 5 years, and so on. They aren’t always asking themselves, “What can you do now to avoid future errors and ensure your business is financially successful?”

Are you prepared to grow? Are you able to access the funds in your bank account? Are you able to get a business credit card? What amount can you borrow on a line of credit or loan? Are you able to get any business credit? You will only be able to get the amount you need if you have a business credit line or card that is active, paid on time, and open. It is best to begin building credit for your business several years ago. This is the best time. Like right now.

These ideas will help you get started in finance.

  • Savings account: As soon as you receive the funds, put 10-20% into a savings account. You won’t need to pay taxes from last year with your profits this year.
  • Personal credit: You are the personal guarantor for your business credit.
  • Business credit: Create and use business credit lines now. Each year, increase them. You’ll have capital ready to go when you expand.
  • Taxes: Only write off some things. My accountant will tell me that the more you pay in taxes, the better. A business owner who writes off almost everything and produces very little in taxes is not making any profit. You will only be able to get financing if that happens. You can only get funding if you make a profit.

2. Personal

Are there ever angry customers who call you after a job wasn’t done right? Have customers and prospects ever left negative reviews about your company on social networks? Have you ever felt heartburn or high blood pressure? It could have been prevented if the “that dang employee just used their heads.” Employees often need to pay attention, resulting in this unneeded event.

Small business owners often make two types of mistakes: They hire people exactly like themselves, or they hire anyone who is breathing. Both of these are huge mistakes. Hiring people like you means there will be no new ideas or outside perspectives. It will all be the same old, same thing. This means that there won’t be any growth. It’s worse to hire people who are not breathing. Employees who aren’t engaged, don’t care, or don’t believe in your company will be able to stick with you for the long term. These employees are more likely to cause problems than offer solutions.

Here are some tips for hiring and training high-quality staff members.

  • Resumes: Make sure you take the time to go through each resume. To determine if the person can stay committed, check how often they leave their job.
  • Cover letter: Require a cover letter. This will give you an insight into the person’s thinking process and communication skills, which are crucial for interactions with customers or other departments.
  • Training: Make sure your training and onboarding programs are well-designed. This is a double-edged strategy. This shows your new hire you are professional, have high expectations, and value them by providing excellent training. It also allows you to prevent customer problems from ever happening.
  • Reviews: Be eligible for employment upon completing their 60-, 90-, and 30-day studies.
  • Skill set: You should look beyond industry experience to find other skills. I’ve found that people who have worked in the same industry for a long time are less able to adapt to change. It is often easier to train people from outside the industry, and it can be easier for them to learn new things.

3. Industry changes

So you now know everything about the Blockbuster-Netflix story. You see the winner of that battle and, most importantly, why. Despite knowing this information, almost everyone is aware of it. Many business owners refuse to update their businesses, even though they know they’re losing business and must make changes.

These are some areas where you can ensure you’re managing change quickly and well.

How can you send/receive funds? Do you still use checks? Perhaps cash? Checks and debit cards are vulnerable to fraud, so you should be prepared. Cash? It’s gone once it’s gone. Your customers will be happy if you have and use safer, more efficient methods to send and receive funds. This will also keep your accounts secure.

Keep up to date with industry trends. If your business wants to be profitable, it must stay current. What changes are taking place in your industry? Are there any new technologies? Are there new business models? What are the changes in your customer base? Attend at least two industry trade fairs each year to keep up with the pace of change. You will learn about the latest trends and determine who is leading the charge and getting the best results. To help your company grow, take part in trade shows.

Advertising and Marketing: Do you still use coupon clippers or the local newspaper for advertising and marketing? You need to use Facebook, Google, and other social media platforms to market your business to avoid losing out to your competitors daily. Companies that take Google Reviews seriously win. It is incredible how many people will only hire companies with a score of 4.5. Get involved with social media and take it seriously. You don’t know what to do? Hire someone.

Pro tip: List the top 10 most difficult problems you’ve faced or are currently facing. Then, write down all the solutions you have to this problem. Now, identify the root cause of the problem and the possible solutions to prevent it from ever happening again. You can avoid any future negative experiences by identifying a pattern.

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