The devil’s in the details, they say. And missing these details can send your business to you-know-where in a handbasket.
The mistakes come from Jay Goltz, writing in the New York Times. He owns five businesses himself and has seen the practical effects of such mistakes:
1. Bad receivables. The biggest troublemaker: the good customers gone bad. Those are folks whose credit you checked when you started doing business and who checked out fine. But they’re going downhill fast — while still promising to pay. Cutting them off is a tough but necessary move.
2. Bad interviewing. Interviewing applicants is an underrated art. Poorly done, it can stick you with a bad employee or a lawsuit.
3. Bad background checks. A clean background check doesn’t guarantee you’re getting a good employee. But doing a less-than-thorough or no background check is an invitation to disaster.
4. Bad insurance. The three biggest mistakes: 1) understating insurance to value; 2) not having employment-practices insurance; 3) not having business-income replacement coverage to replace lost revenue until the company is up and running again.
5. A bad accountant. You pick someone to do your taxes. Fine. Is that same someone qualified to keep tabs on the financial health of your company?
6. Bad controls. Theft and embezzlement are company-killers. Get an accountant to help you set up prevention systems.
7. Bad company policies. Usually, they’re enacted because they benefit the company. But do they benefit the customers?