I have been crusading against dumb financial mistakes business owners make small business owners make ever since I lost $1M off the sale price of my last business because I could not read a balance sheet; and I had an MBA from Northwestern University!
On The Small Business Radio Show this week, my guest is Ruth King who is the President of Business Ventures Corporation. Ruth has a passion for helping businesses get and stay profitable. She is especially proud of one small business owner who had $750,000 in revenues when Ruth started consulting with him. Sixteen years later, the business had grown to $10 million and it was sold for $9 million in cash!
Her latest book, “101 Dumb Financial Mistakes Business Owners Make and How to Avoid Them”, will be released in September, 2023. It is preceded by the #1 Best Selling book, “The Courage to be Profitable”.
Here are the dumb financial mistakes we discussed and how to avoid or fix them:
- Abdicating the Responsibility of the Financial Side of Your Business.
- Having the Mercedes Benz Syndrome.
- Blinding Accepting What Your CPA Says.
- Ignoring Weekly Cash Flow Reports.
- Not Billing on Time.
- Focusing on the Top Line instead of the Bottom Line.
- Not Asking Your Employees to Fully Participate in the Financial Goals of the Business.
- Not Knowing Where Your Leads Come From.
- Not Tracking Sales Peoples’ Close Rate.
- Not Firing a Customer.
- Not Having a Buy- Sell Agreement with a Partner.
- Not Knowing Why You Are in Business.
- Pricing Incorrectly.
- Paying Commissions Based on Gross Margins.
- Not Considering Unbillable Hours in Your Pricing.
- Not Raising Prices When Costs Increase.
- Not Recognizing That Your Balance Sheet is More Important Than Your Profit and Loss Statement.
- Not Collecting Your Accounts Receivable on Time.
Listen to all the dumb financial mistakes we make on and how to fix them on The Small Business Radio Show.
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The comment about not knowing where your leads come from is a good one. I work on the digital ads of several clients and tracking is the first thing we nail down.