Play To Win: Avoid 5 Common Small Business Fails

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  4. Play To Win: Avoid 5 Common Small Business Fails To Be

While building and managing a team may be an important part of some small businesses, many successful entrepreneurs also have a defined self-reliance. The ability to think and act independently, without the input of others, is a very common trait among successful small business owners. Amplify your business knowledge and reach your full entrepreneurial potential with Entrepreneur Insider’s exclusive benefits. For just $5 per month, get access to premium content, webinars, an.

Play to Win: Avoid 5 Common Small Business Fails Elizabeth Kraus. Seattle-based marketing consultant and the owner of The Marketing Desks and author of 365 Days of Marketing. Here's how to avoid a common mistake small businesses make when applying for loans, according to an SBA official Published Wed, Apr 22 2020 12:06 PM EDT Updated Tue, Jan 12 2021 10:35 AM EST Megan. 7 Common Traps Entrepreneurs Need To Avoid At All Costs The headline says it all, but though and still, entrepreneurs will fall into these common traps! This happens because the ground you’re walking on has multiple traps that have been camouflaged, and you’re not using the proper perception and keen sensibilities; or, your confidence has.

The headline says it all, but though and still, entrepreneurs will fall into these common traps! This happens because the ground you’re walking on has multiple traps that have been camouflaged, and you’re not using the proper perception and keen sensibilities; or, your confidence has turned into a huge ego that’s about to be deflated. Let’s take a closer look at what these traps are:

Traps Entrepreneurs Fall Victim to

1) Hiring your friends and family

“Keep it in the family!” We all have heard this saying. Practicing this is a great and noble thing, but perhaps your cousin Dave, the semi-pro skier, doesn’t know about derivatives and shares. Perhaps he’s not the best person for the job. Find the right person; pick the specialist. You’re starting small, so you need someone that can do the job, not your cousin Dave…no matter how good he may be on the slopes. Picking the right team members can be detrimental to your company growth, so choose wisely.

2) Spending before the check clears

Swag bags, salesforce implementation, bonuses, etc. You were promised $200K by a client, and the check didn’t clear, but you were so excited you started spending that money. Now you’re $150K in the hole! Don’t spend it, until you got it. Granted, the swag bags and employee gifts are awesome, but be diligent in your spending habits.

3) I can’t lose!

This. Is. Dangerous. It is vital to be humble. Confidence burns brighter in a room when it’s coupled with humility. Humility can take you a long way, and can also save you from heartache and gross pains. Where there is a grandiose ego, there is usually a lack of integrity that follows. Take your losses and fail forward, it’s all part of the ride to your success.

Play To Win: Avoid 5 Common Small Business Fails Fail

4) Trading money for integrity

Simply, don’t do this! Just don’t! You may get what you want in the short game, but that decision that you made comes with strings attached, and whomever is controlling the strings will make sure they play with the puppet…catch my drift.

5) Failure to workout

Physical conditioning is in direct correlation to mental conditioning. How you feel physically truly determines how you feel mentally, and as an entrepreneur, you need to feel empowered and confident throughout your journey. If you are sluggish, overweight, tired, or eating poorly, your work habits and output will reflect those habits. It is just that simple.

6) Looking in the rearview

If you continue to look at your previous failures without an objective in mind, you will be stuck looking in the rearview on your journey and it will end quickly because you will end up hitting something while moving forward. And since you weren’t paying attention, that car accident was greater than it needed to be because you weren’t wearing a seatbelt. That seatbelt was your safety net i.e. an emergency funds account that could’ve saved you from bankruptcy! Don’t dig ditches and complain about being stuck in them. Live life in the present, not in the past.

7) You can’t do it all alone

Once again, check your ego in at the door. Business is a team game! Building a business is a team game! You must be open minded and humble enough to trust others to get the job done. Be a leader, empower people to be successful. But there is no way you can do everything yourself. You’ll end up in the hospital, without COVID-19!

Common

In conclusion, there are quite a few traps that can land you in a hole, scratching your head, wondering how you got there. But take these seven that I’ve touched upon and consider more that you might be victim to. Write them down, then write down why you could succumb to some of these traps. Keep your eyes on the prize, stay focused, watch where you walk, and keep moving!

Know any more common traps entrepreneurs should avoid? Let us know down in the comments.

This article originally published on GREY Journal.

Owners must maintain a high degree of crucial oversight over their financial affairs.
Opinions expressed by Entrepreneur contributors are their own.

Fraud can plague any business -- organizations report losing 5 percent of their annual revenue to fraud. But small businesses exhibit specific vulnerabilities. For starters, they often lack the resources to sufficiently implement internal checks and balances for their accounting systems. Additionally, those performing the accounting duties are likely assigned multiple tasks that may or may not fall within their expertise. Finally, despite cultivating a culture of trust inside the business, the likelihood of internal fraud is just as high among long-term employees as with contract workers.

Related: 'Trust But Verify' Is How to Fight Back Against Employee Theft and Fraud

Play To Win: Avoid 5 Common Small Business Fails Using

This makes sense when you consider that small businesses are powered by passionate owners who invest so much of their time and energy into pursuing their dreams. They work hard, but their focus can be pulled in a thousand different directions during any moment of the day. When they experience the thrills of success and growth, they also have to be prepared to face increased challenges, such as monitoring cash flow.

For these reasons, successful small business owners must maintain a high degree of crucial oversight over their financial affairs. They have to equip themselves to identify and act on five of the most common fraudulent practices and scams that can prey on them.

1. Payroll fraud.

Payroll fraud occurs in 27 percent of all businesses and twice as frequently in small businesses (fewer than 100 employees) than larger ones. Owners must gain a working knowledge of the payroll system and enforce accountability among book keepers in their monthly reports. Since payroll complexities significantly increase as a company grows, especially if overtime is a factor, owners have to maintain consistent scrutiny.

2. Cash theft.

Play To Win: Avoid 5 Common Small Business Fails For A

Cash has a funny way of disappearing in a small businesses. Whether through skimming (when an employee takes cash that hasn’t been reported into the accounting system), larceny (when an employee takes cash that has been reported) or fraudulent disbursement (when an employee releases funds that haven’t been authorized by the owner), cash theft creates a negatively cumulative impact on the bottom line. From the outset of setting up a business, an owner needs a streamlined cash monitoring process, both for an effective financial process and also to maintain essential supervision of cash within the business.

Avoid

Related: 3 Tips for Giving Your Small Business a Financial Spring Cleaning

3. Online banking.

The increased popularity of online banking has also increased the likelihood that funds could be transferred to erroneous accounts. Owners should schedule regular meetings with the accounts team to monitor all transferred money. Cybercrime has never been more sophisticated, and small business owners need to arm themselves with updated information on threats to respond accordingly with their relevant financial institution.

4. False invoicing.

Play To Win: Avoid 5 Common Small Business Fails To Be

Business owners must have basic oversight over every vendor in her business because false invoicing is an increasingly popular fraud method. It often strikes when an employee creates false suppliers or when he pays a legitimate supplier and diverts the cash into an alternative account.

5. Invoice email.

This scam often involves perpetrators who pose as legitimate suppliers and advise changes to existing payment arrangements. The fraud may not be detected until it's too late -- when the business is alerted by complaints from suppliers that payments were not received. Regular account check-ins can help guard against business owners falling victim to this type of fraud.

Related: Looking for a New Payment Company? You're 'Due' for Some Good News.

Small businesses that have reported fraud suffered a median loss of $150,000. That kind of hit can break a business. While successful owners must surround themselves with an exceptional team, they also need to firmly control their financial processes. The trap that many owners fall into is over-relying on delegation, particularly during periods of expansion. When owners are too hands-off with business financials, the potential for fraud and detrimental loss rises.