7 Bad Decisions That Can Ruin Your Business

Most bad decisions won't ruin your business, but these seven can be deadly.

Jose Vasquez - Over the course of your time as an entrepreneur, you're going to make some bad decisions. It's inevitable. Fortunately, most of those bad decisions are fleeting, with short-term consequences but no real lasting damage to the integrity of your business. However, there are some major decisions that can potentially spell the end of your enterprise--even if you attempt recovery after the fact.

In your business, make sure you steer clear of these seven terrible decisions:

1. Ignoring Cash Flow. Cash flow is your business's pulse--without positive cash flow, your business literally cannot operate, so keep a close eye on it, especially in the first few months and years of your business's development.

Tweet

Take The First Step To Start A Business But Don't Quit Your Day Job

Puneet Mehta - The hardest part about becoming an entrepreneur is deciding you’re going to do it—cutting ties with your current comfortable lifestyle and taking the first step. I have friends from business school who, in my eyes, are as smart or smarter, more disciplined and with more potential than some people I know actually running successful companies, but they lack the guidance or confidence in making that first move. They say they want to venture out on their own, but then five years will pass and they’re still working for the same giant companies.

I always knew I wanted to started something on my own, but just like those peers of mine with so much potential, I had no idea how. I held lots of conversations with business owners, but not much seemed to help. I was scared of taking that first big step—quitting my job with my comfortable salary and lifestyle. Luckily, I found a way to start the company I dreamed of without having to take that risk.

About three years after I’d completed my MBA, I was working for a really good mid-size company. I kept quite busy and was happy; my hard work was really paying off for them. I was making more than any MBA three years out would expect to make, and I was spending upward of three hours a day strategizing with the CEO. I was making the company a lot of money it clearly wouldn’t have had without me. I could tell I was appreciated.

Tweet

4 Ways to Inspire Others in Business, and Beyond

CARM LYMAN - As an entrepreneur, your ability to inspire people -- be they your employees, customers or others with whom you interact -- is critical to your business's success. And at the end of the day, all that inspiration makes everyone feel good. Just ask the driving force behind the Inspiration Campaign, Robert Bengtson.

Bengtson, whose campaign erects billboards with inspiring messages, says he sees inspiration as an opening of doors, a means of seeking inspired action. There are lots of different actions an individual can be inspired to do, and ultimately, those actions equate to a better attitude toward life, which itself impacts your work as well as how you interact with others.

So, if you are looking to inspire others, these four tips from Bengtson are a great place to start.

Tweet

9 Ways to Avoid Rookie Mistakes When Starting Your Own Business

NICOLE LAPIN - Lots of people are dissatisfied with their careers and believe they'd be better off braving it on their own. After all, the "new normal" we all live in is not so pretty: job uncertainty, financial uncertainty, pay cuts, furloughs. With the jobs picture so bleak, many people tell me they'd rather get paid in happiness. And that might mean jumping ship to start your own thing.

But there is one thing to know before you take that proverbial leap: You are probably going to fail.

That's why, in the beginning, it's better to have low expectations -- so you can exceed them. Just because you're a small business owner doesn't mean you know how to be a boss. A great chef doesn't necessarily know how to run a restaurant. An internet whiz doesn't necessarily know the ins and outs of marketing. That's why it's important to know what you don't know, then find creative ways to learn it and/or work with others who have that knowledge base you're missing.

The dirty little secret is that no one has it totally figured out. But every day it gets better. We all fake it to some extent . . . until we make it. However, there are some steps you can take to ensure you don't make too many rookie mistakes (because you will make some, believe me) and do get on your way to creating a successful business.

Tweet

To Succeed With Your Small Business Avoid These 5 Mistakes

CHUCK PISTOR - At one time or another, virtually everyone thinks about starting a business. The allure of being your own boss can be strong, but it’s important to remember that launching a new business is risky: According to a recent SBA report, [PDF link] about 50% of all small businesses will fail within just five years.

Managing a startup can be a minefield, especially when the pull of entrepreneurship clouds your decision-making – and when you go it alone with no business experience. But if you do decide to start your own business, it’s a great idea to learn from other’s mistakes and set yourself up for success. Here are five mistakes to avoid:

1. Inaccurately gauging demand for your product or service.
Remember – just because you like jalapeño-flavored pickled okra, that doesn’t mean everyone likes it. Too many small businesses fail because the owner overestimates demand. Before launching your venture, find out how strong the demand is for your product or service. Is it a product or service that most people need or want? Does it fit with current trends? For instance, a DVD rental store is probably not a good investment now due to the popularity of streaming services. Before settling on a business venture, ask yourself if the benefits to the customer are compelling and easy to understand. Test demand for your product or service by vetting it with a wide range of friends and family who will be brutally honest with you.

Tweet

Perform Due Diligence on Potential Investors

Tom Taulli - Before your company receives an infusion of equity capital—whether from a venture capital firm or an angel investor—an investigation into your operations usually takes place. The process is commonly known as due diligence, and it can be grueling since the investor uses it to try to uncover weaknesses, potential liabilities, and risk exposures.

I propose the following: why not perform a similar investigation on your potential investor? After all, she will essentially become your long-term partner. Knowing her background, in terms of prior deals, industry expertise, and executive stints, is important.

Assuming the investor will allow you to engage in reverse due diligence (and it's a warning sign if she won't), how you start the process depends on whether your investor is a VC or angel. It's generally easier with VCs, since there will probably be more information available on the firm than on an individual or an angel group.

Tweet

4 Steps to Take Your Local Business Global

Chris Doe Ford - Imagine your business being promoted not only by you and your sales team but by thousands around the world. Can you picture what that would do to your bottom line? With all due respect, can you get outta your own way for a minute and consider the possibilities?

As a business owner or executive, too often we become focused on our local market. We become focused on beating our local competition. We become focused on following up with that local lead. We become focused on trying to motivate our sales team. Don't get me wrong here. Being focused is a great thing. However, let's harness that focus and explode it globally.

You may say, that's great Chris, but what are you talking about. How do I take my local mom & pop business, or my local agency, or my local whatever type business, and expand it worldwide?

Relax. It's not that difficult. Just a few simple steps and we can be receiving inquiries, orders, and sales from sources we didn't even think existed.

Tweet