I ran across this interesting article today by Eric Rudolph that addresses some of the key mistakes that business owners make:

  1. Pursuing Business Opportunities Outside of Your Company’s Core Competency
  2. Betting Your Entire Business on One Client
  3. Hiring Your Friends and Relatives
  4. Offering Less-than-Minimum Benefits
  5. Thinking You Can Do Everything

You might argue that you have special circumstances on any one of these.  For instance, on the  last one, you might not have money to go out and hire people to do everything in the company.  But that’s not the point.  You need to find the things that would damage your business the most if you mess them up – like keeping books that are actually correct – and find expertise to help you.  When you’re a small company, it may well not be with full-time employees.

The one that rings least true for me personally is the third one, since I know a number of small businesses that have done this and it’s worked out just fine.  But even here, Eric makes a strong point:  You have to understand the impact that this has on the interactions between people.  It can be demotivating, create misalignment of goals, and drag you off in emotional territory.  As they say, enter into this with your eyes wide open.

Read the article “Five Ownership Mistakes” on Eric Rudolph’s Blog»