Whenever you hear or read the news and you find a company doing something really dumb – getting caught by the IRS for not paying taxes, throwing outrageous parties, building an illegal pyramid scheme, paying bonuses with money they don’t have, or selling really lousy products as fast as possible to make money and get out before they are caught, it makes you wonder. Why would they do it? Isn’t it just as easy making money in a great way as it is making it in a dumb way?
Probably the best way to answer those questions is to say every one of those companies is being run by a smart person. Yet every single day, smart people do dumb things. Its easy to get caught up in it all, and before you know it, you’re caught in a trap that can literally shut your business down, no matter how big or small it was at the time.
No matter what stage of business you are at, here is a way to minimize doing dumb things.
1. Always look for someone employees, advisers or consultants that are ready, willing and able to make you think about the other side. As a small business owner – a solo business owner – its easy to get completely caught up in your own ideas. Even if they are bad and don’t stand a chance of helping you build your business. Look for someone that can argue other points with you and make sure you are proceeding in the right direction.
2. Don’t jump at another’s ideas. Just because someone sees things a different way and has a strong support for his or her idea doesn’t make them right – anymore than it makes you right. Stop, take a step back, and look at the situation logically. If you need to, talk with others about the idea before you make a rash decision. Focus groups work great and can help you look at your ideas through the eyes of your clients.
3. Spell things out. If you tell your accountant you want to pay as little tax as possible, don’t assume he will do it in a legal way. Research the people around you and watch what they do. In some cases, it may be best to tell them “I want to pay as little tax as possible in a legal way.” Don’t assume; assuming can get you into trouble.
4. Never rely on one expert to run your whole business. If experts create your roadmap, its no longer your business. Instead, use them to supplement your ideas and help you understand how to put your own actions into play as fast and as effectively as possible. [Read more…]