At Bryant Taylor Law, we have a healthy mix of experienced and novice business owners. Here is a list of the 4 most common business mistakes we have observed with our business-owner clients.
Business Mistake #1
Not understanding their financials
Business owners do not need to be an accounting expert, but they must have a basic understanding of their business financials. Hiring an accountant helps, but it is not enough. Business owners need to know what a financially healthy business looks like on paper. This means having a basic understanding of a profit loss statement and balance sheet. This allows the business owner to make adjustments to the business when necessary. Ignoring or not understanding the financial health of the business is a costly business mistake. It often leads to over or irresponsible spending, which can kill an otherwise viable business.
Business Mistake #2
Rushing into new deals or partnerships
The prospect of bringing on a new business partner or signing a potential lucrative deal is very exciting. The potential is so exciting that business owners may want these deals completed as soon as possible. As a result, business owners agree to deals with little or no investigation. Sometimes it works. Other times, the deal isn’t what it once seemed, problems arise, or the deal turns out to be a scam. The majority of issues that arise after a deal is completed could have been prevented with proper research and investigation. To avoid this mistake, take your time, seek legal advice and reevaluate your feelings after proper investigation. There are very few deals that need commitments right away. Take your time.
Business Mistake #3
Using online contracts
Of the four business mistakes on this list, this is the most understandable. These generic contracts online are cheap (or free), fast and easily accessible. Business owners making this mistake may think they are at least better off than other business owners who forsake contracts altogether. This may not always be true.
Online contracts are not designed for your business. Although there are some transactions that are simple enough to complete with a standard contract, there are many others that are not. Also, every state has different contract laws so there is no assurance the online contract conforms to your state’s laws. As a result, it is difficult to assess if the contract accomplishes its intended purpose without the advice of an experienced small business attorney.
There’s also no way to communicate with the person writing the contract. We have a client who purchased an online contract from a company before hiring us. His biggest complaint was that he did not understand some parts of the contracts he purchased. He thought he could speak to someone from the company to help him understand what he purchased, but the company could not help him. The same issues occur when a business uses a Google to find a contract.
This business mistake appears cost-effective but can be costly in the long-run if there is ever a dispute regarding the contract.
Business Mistake #4
No repeatable processes
New business owners move so fast and tackle so many issues in a given day it is hard to sit down and document their processes. Processes meaning a WRITTEN set of procedures, policies and checklists that can be learned by someone else. Business owners focus so much on running the business, they do not take the time to document HOW they run their business.
A written process is essential for the longevity of any business. The process must also be repeatable, meaning the process is clear enough for some other than the business owner to follow. Neglecting the time and effort to write down the processes of the business is a critical mistake. It makes it harder to train and retain employees, makes growth difficult, and may prevent the business from ever being sold or successfully passed down to another generation.
As with any journey, business ownership is full of unforeseen obstacles. No business owner is perfect so mistakes are inevitable. However, the mistakes are avoidable. Avoiding these business mistakes will significantly increase the chances of running a successful business. An experienced business attorney will help you avoid these mistakes. To find out how exactly a Fort Lauderdale business lawyer can help you avoid these mistakes, call us at 954-282-9331 or reach us online to schedule a consultation.
Bryant Taylor Law
333 Las Olas Way
Fort Lauderdale, FL 33301