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10 Most Costly Mistakes for Small Business Owners

Running a business is tough. When you put out your shingle that says open for business you take on at least 12 jobs at once including CEO, CFO, Social media manager and Secretary, any of which could cause you to go out of business quickly if you make a significant mistake. Below are a few of the costliest mistakes I’ve seen repeatedly in my nearly two decades of running a professional service business. Hopefully, reviewing them will reduce your chances of making these kinds of errors. Carefully read the 10 most costly mistakes for small business owners, it will help you stay on the right path. Poor Cash Flow Management Cash really is KING. The most common mistake in business in not staying on top of cash flow. If you do not carefully manage your cash, you could soon be out of business, even if business is booming. Make sure that payment schedules are clear and agreed upon, and enforce them, a slipping payment schedule is a sign of a breakdown of some kind – even if it’s only a mail delivery problem. You need to track your accounts receivable turnover ratio, or how fast money is received once an invoice is issued to a customer. You also need to accept digital payments in all forms. Push for EFT or Electronic Funds Transfer and Wire payments. Offer discounts for early payments such as 2% for Net 10 payments. Never offer discounts for Net 30 payments, that is a business standard. When possible demand at least a one-third deposit. Start your collections process on Day 31 when payment has not been received, and don’t hesitate to make a call to track down your funds. Poor Project Management There’s external and internal project management. External is about the client management and internal management is about how you need to mange and communicate with your team. You must clarify exactly what is expected, when it will be delivered to clients. It will serve you well to go out of your way to clarify in writing a project plan after the contract is signed.…

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