Managing a Small Business
Mistakes to Avoid - Avoiding the Biggest Business Blunders

Avoiding the Biggest Business Blunders

You've Got To Be Really Different!
No matter how talented you are in business, you're going to make mistakes. But if you can avoid just a few of the biggest, most crucial mistakes that I've made, success is going to come a whole lot easier.

In several different businesses, I completely torpedoed any chance of success by making direct frontal attacks at established businesses, competing for the same customers in the same way. For example, I started a free newspaper offering general "Help Wanted" ads, competing more or less head-on with Boston's big newspaper, the Boston Globe. Guess who won?

At the MBA programs they call this "strategy," but it's just as easy to think of it as being "different." Not just a little better-but really different! With my newspaper, I could have gone for a particular market segment-like technical help. Or perhaps I could have tried something really different like running job fairs or collecting resumes of job candidates and selling access to them.

Never Look At An Expense In Isolation!
It's so easy to make blunders handling money in a business. But my biggest mistakes come about when

I don't keep looking at the budget and the cash-flow projection.

Every day in business you are bombarded with what seems like great reasons to spend money on something you didn't budget. You get ideas from ads, salespeople, employees, even your relatives!

Taken in isolation, so many unplanned expenses seem like a great idea! Think how fast a new computer would be! Wouldn't new desks look sharp!

But when I start to make even one or two exceptions a week to my budget, I soon find my budget and profit projection were just a fantasy.

Walk Before You Leap With Marketing!
I could talk about my marketing blunders forever-but the bottom line is clear. You never know what is going to work in marketing, so don't be afraid of making lots of mistakes-as long as they are small mistakes!

1. Never, ever, spend lots of money on any marketing program until you see that it is bringing in money.
2. Never assume that someone else's marketing program will work for you.
3. Never assume that an ad agency or marketing expert can guarantee you results-no one can.
4. Make small test promotions and put in that extra effort to carefully measure results.
5. Ask every customer how they heard about your business, and track the response to every promotional effort.

Spring For The Coffee!
Everyone makes some big blunders managing people, and I've made more than my share. A lot of business owners and newly minted managers tend to be too harsh and demanding-like me!

At one of my first ventures in college, a house painting business, even my employees would give me free people-management advice. I remember one of them saying, "Hey, Bob, how come you can't act like a normal guy and spring for coffee and doughnuts now and then?" I grudgingly started taking five bucks out of my wallet and ten minutes out of each workday for the coffee break, but in higher productivity I probably made back the money many times over.

Obviously, buying the coffee is only a starting place in treating people right. I've found that you can't just drive people to work 100 percent flat out all day long and well into the night-well, at least not every day! So even if people are doing a reasonably good job-loosen up and show them how much you appreciate their work!

Nurture Relationships With Key Customers!!
Dealing with customers is something I never seem to get right. Like so many businesses, we spend too much effort on making the sale and not enough on building the relationship. This would be fine if nothing changed or there were never any major problems-but there always are.

You are so much better off if you have developed a close relationship with key decision-makers, and not just the buyers at businesses with which you are dealing. Sooner or later I find that there will be some kind of problem-such as over discount, payment terms, faulty products, or whatever-and you're going to end up dealing with the key decision makers for the first time under negative circumstances.

Even if you're a relatively small vendor, you may be surprised how receptive executives of a large company you're doing business with may be to meet with you, especially if they know you are not just meeting with them to simply get more orders, but to try to serve their needs better.