Small Business

Dumb Financial Mistakes Business Owners Make and How to Avoid Them

Feb 20, 2023 2 years ago

I have been crusading against dumb financial mistakes business owners make small business owners make ever since I lost $1M off the sale price of my last business because I could not read a balance sheet; and I had an MBA from Northwestern University!

On The Small Business Radio Show this week, my guest is Ruth King who is the President of Business Ventures Corporation. Ruth has a passion for helping businesses get and stay profitable. She is especially proud of one small business owner who had $750,000 in revenues when Ruth started consulting with him. Sixteen years later, the business had grown to $10 million and it was sold for $9 million in cash!

Her latest book, “101 Dumb Financial Mistakes Business Owners Make and How to Avoid Them”, will be released in September, 2023.

It is preceded by the #1 Best Selling book, “The Courage to be Profitable”.

Here are the dumb financial mistakes we discussed and how to avoid or fix them:

Abdicating the Responsibility of the Financial Side of Your Business.
Having the Mercedes Benz Syndrome.
Blinding Accepting What Your CPA Says.
Ignoring Weekly Cash Flow Reports.
Not Billing on Time.
Focusing on the Top Line instead of the Bottom Line.
Not Asking Your Employees to Fully Participate in the Financial Goals of the Business.
Not Knowing Where Your Leads Come From.
Not Tracking Sales Peoples’ Close Rate.
Not Firing a Customer.
Not Having a Buy- Sell Agreement with a Partner.
Not Knowing Why You Are in Business.
Pricing Incorrectly.
Paying Commissions Based on Gross Margins.
Not Considering Unbillable Hours in Your Pricing.
Not Raising Prices When Costs Increase.
Not Recognizing That Your Balance Sheet is More Important Than Your Profit and Loss Statement.
Not Collecting Your Accounts Receivable on Time.