Mistakes not to make when Starting a Business

Mistakes not to make when

Starting a Business

By Mike McLoughlin,
Youth With A Mission, Marketplace Mission
Visit the Scruples Small Business Forum at www.scruples.net for more information.

DON'T	DO
DON'T SELL ON CREDIT.	DO SELL ON CASH BASIS ONLY.
New business people feel the pressure to make a sale. Customers will take advantage of you and get your product on credit. Then you may have a problem collecting it from them especially if it is for a small item. Don't waste your time and your money chasing people for small credit purchases. Keep it strictly cash!	If you were to sell your product in the market you would not accept credit purchases. If people tell you that they will have the money at the end of the month, then you tell them you will sell it to them when they get the cash. You may take a cash deposit on large items such as furniture but only cash on small items.
DON'T EAT YOUR SEED CAPITAL.	DO PROTECT YOUR CAPITAL INVESTMENT.
Farmer's who eat their seed before planting it are foolish! So business people must be careful with the seed capital from a Severance Package or other large sums. The money should be treated as untouchable except for planting into a business!	Keep your seed capital in a safe place. Watch out for the bank that you have it in, how stable is it? Don't put "all your eggs in one basket," that is don't risk all of your capital on one investment. Spread it out over several investments with different levels of risk from a treasury note to a new business start up.
DON'T BE CARELESS WITH YOUR MONEY.	DO ACCOUNT FOR YOUR MONEY.
If you catch one of your employees taking money from the till for their personal use what would your do? You would fire that employee. Well, many small business people need to fire themselves for the same activity. Don't take money from the business except as a proper arrangement!	Small business people need to keep the money in the business separate from their personal money. It may be helpful to have two bank accounts, one for business use and one for personal use. Otherwise, the two types of money are different and should be kept separate!
DON'T BE IDLE UNTIL THE LAST MOMENT.	DO BE READY FOR EVERY OPPORTUNITY.
Remember the parable of the wise and foolish virgins, some with oil and some without. Those who wait until the last moment to do business will find themselves shut out of every opportunity.	You must be ready with capital, staff, facility, product, know how, etc. when the opportunity presents itself. If you are actively seeking opportunities, you will be ready for them.
DON'T BE AN ABSENTEE OWNER.	DO BE HANDS ON IN THE BUSINESS.
Don't leave your business in the hands of others, employees or family for long periods of time. You may come back and find there is no business to come back to!	Be there in your business and monitor your employees. Get behind the sales counter or steering wheel and find out what is going on at the front line of the business.
DON'T BE HASTY TO GET RICH QUICK.	DO BE CAREFUL AND SLOW TO DECIDE.
There are no "free lunches." If it sounds too good to be true then it probably is! These old sayings can guard you against unscrupulous business people who will promise you riches and only deliver poverty!	Take time to think about your decision. Share the options with your spouse or close friend for input. Nothing is so urgent that it can't wait a day or two for you to decide. Take your time and be careful!
DON'T LET OTHERS TAKE ADVANTAGE OF YOU.	DO LEARN TO SAY NO!
Friends and family will want to take advantage of their relationships with you to get your best product cheaply.	Learn to say NO! Reserve a portion for friends and family, but when it is gone don't give anymore.
DON'T WAIT FOR THE BUSINESS TO COME TO YOU.	DO WORK HARD TO FIND BUSINESS.
Some Business people expect that all they need to do is open the door of the shop and people will come in.	Those who search diligently for something usually find it. So don't give up until you find more customers.
DON'T KILL THE GOOSE THAT LAYS THE GOLDEN EGGS.	DO BE FAITHFUL IN YOUR COMMITMENTS TO YOUR BEST CUSTOMERS.
Some business people will increase the price of a product and lower its quality when they have a regular customer who buys sight unseen. Soon the customer will notice the difference and will stop buying from you.	Be faithful to your best customers. Only increase the price after discussing the reasons with your customers and showing them why it is necessary. Make sure to keep the same level of quality in the product.
DON'T BE UNPREPARED FOR DEATH.	DO BE PREPARED FOR EVERY EVENTUALITY.
Even when a business person falls ill, there is no preparation for the illness or death. There should be people able to step in for the owner should he or she become unable to run the business.	Register a will with a qualified legal professional. Although spouses may have separate confidential wills. They must decide together how the business should continue if one of them dies.

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