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Avoid Home Business Mistakes
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Article 3: Subtle Mistakes
Beyond the basic blunders we’ve covered up to this point, there are other wrong steps that are taken more often than one might assume because they’re not always easily spotted.
These are the kinds of subtle errors that can undermine effectiveness and profitability. They are insidious because they lie just below the surface, deep enough to be out of sight and out of mind. We bring a few into focus.
- Don’t market your home-based business differently than you would a storefront operation. Just because you operate out of the spare room, doesn’t mean you should consider your operation less of a true business than if it were located in a downtown high-rise. You need comparable advertising and promotional efforts to your competitors’, even though their shop may be in the local strip mall.
- Don’t become lax with your financials. Record keeping can be a pain, but your financial records – accounts receivable and payable, ledgers, profit and loss statements, bank account balances – all are vital.
Financial records help you keep track of your own financial status. They’re necessary for obtaining loans and applying for credit lines. Perhaps most significantly, they’re useful in persuading the IRS in the event disputes arise over taxes. If accounting isn’t your cup of tea, consider having your books kept by a consultant or an accounting firm. These are records you rely on. They need to be professionally maintained to be reliable.
- Along this line, you should establish a relationship with a certified public accountant or an enrolled agent. Even if you keep your accounting duties in-house, the advice of these professionals is well worth the cost.
- Similarly, don’t shy away from bankers. They too can become sounding boards and advisors, often seeing things from a perspective and with the benefit of experience that you do not have. Establishing these relationships also gives you a leg up when it comes time to borrow, obtain a business line of credit or seek network connections with other businesses that may supplement or complement your own. Bankers can be a hub of such information and networking opportunities.
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