Small Mistakes Most Small Businesses Make

 

In the small business world, there’s no such thing as a small mistake. Even a minor error can have severe consequences.

It might go undetected for months or years but then rear its head suddenly, causing problems for you and your customers. Below are four examples of small glitches that can become big issues over time.

Typos

Who cares about a minor spelling error or a minuscule punctuation mistake? Your prospects and customers do, and they care a lot. For example, assume you incorrectly enter someone’s email address into your CRM system. This might have two consequences:

• Your intended recipient won’t receive your emails, losing opportunities to visit your website or buy your product or service.
• Someone who didn’t request your emails begins receiving them. This might annoy the person and potentially trigger legal consequences.

In short, a simple email error can result in lost revenue or legal concerns in the future.

In addition, allowing content with spelling or grammar errors to appear on your website may cause site visitors to wonder, “Is this company’s business practices as error-prone as its content?”

SIC Codes

Your Standard Industrial Classification (SIC) is just a string of boring numbers, right? Wrong! It places your firm in the right business category, allowing entities such as banks, insurers and others to make decisions about you.

For example, imagine that you own a real estate appraisal company. When establishing your firm, you researched which SIC code to use when preparing financial documents. However, instead of using the code for real estate appraisers, you used the one for real estate agents and brokers. You unwittingly put yourself in a higher-risk category, which caused your banks to deny financing. This is a case where making a small clerical error can weaken a company’s financial position, if not immediately, then potentially months or years from now.

Incorporation Errors

No rule says you must incorporate your firm right away. Many entrepreneurs operate for years as sole proprietors without a problem. But consider this scenario: You run a consulting business for five years, eventually posting $50,000 in monthly revenue. After five years, you decide to incorporate shortly before applying for a business line of credit.

Even though you thought your business was in great financial shape, the bank turned down your credit application. Why? Because it thought you were a brand-new company. Moreover, the fact that you were generating $50,000 a month as a new business (the bank’s assumption) triggered a fraud warning. Result: The bank rejected your application.

The lesson is plain to see. Before changing the legal entity of your business, consult with your attorney or accountant to identify potential timing issues. You don’t want an error like incorporating at the wrong time to weaken your ability to make a living.

Other Operational Errors

Minor (yet big) errors can occur in almost every area of your business, from marketing to HR to finance. Here are some crucial mistakes to avoid:

• Inconsistent branding – Be careful to align your company brand across all social media platforms. You’ll confuse your prospects and clients if you run different logos or different taglines on each one. This may reduce the likelihood of them clicking through to your website to sign up for your newsletter or download a content offer.
• Not having employee job descriptions – Job descriptions aren’t passé; they’re essential for your recruiting efforts. They will help you hire the best person for the job and convey the message that your firm is an employer of choice.
• Not checking out vendors – Doing business on a handshake is never a good idea. Do rigorous due diligence before hiring a new vendor for your company. And don’t confine yourself to a cursory Google search. Verify all business licenses, interview references and consider hiring an investigation firm to perform a full background check (especially for accounting, financial and legal advisors).
• Not reviewing your insurance policies – Carefully read all new and renewing insurance policies before putting them away. This will help you uncover and correct errors in your policy documents. More importantly, it will remind you of the coverage in place should your company suffer a loss.

The bottom line on small mistakes by small businesses? Please don’t make them!

When you publish content on your website or make legal or financial decisions, always sweat the details. Educate yourself about the action you’re about to take. Seek advice from a professional when in doubt. And take your time and double-check your work when executing decisions, especially major ones.

Because, at the end of the day, doing your job correctly the first time around will pay huge dividends to your clients, employees and especially to you!