Entrepreneur world is not a child play. Every wrong decision will cost you a lot, even your entire business. In the today market, the threat to your business not only comes from the outside fierce competition, but rises from your unwell prepared back-office work as well, especially when you are a new and small entrepreneur. Beware with every step you takes, and try to avoid those killing traps below.
Trap #1: Human Recruitment
Human resource is one of the most important component to the company\'s success, so it takes patience and skill to hire the right people. A applicant\'s reply "I work hard and I\'m a fast learner. I just haven\'t had the right opportunity." may satisfy your busy entrepreneur mind, but be wise and smart. You should take a wiser way of selection: Call the reference, ask right question, listen hard and \'feel\' the truth.
Do not recruit people rely merely on the application interviewing skill but seek for other truthful sources to test them.
Trap #2: Price Calculation
Many new and inexperienced entrepreneurs do not know which price should they sell their products. They set an unreal price without considering the actual cost of products (The cost of good sold - COGS - which includes regular cost plus often-neglected components like scrap, freight, damages, theft and obsolescence as well) and do not figure out the number of goods sold to ensure their plan profit.
Unexperienced entrepreneuers offten end up with: too low price - not gain enough profit (or cover cost), or too high price - which makes no customers even take a glance to the goods.
Trap #3: Firing People
When it had to go, it had to go - you may feel guilty to fire an unsuitable employee, especially a warm and loyal one but with limited working ability. In fact, if you want to run your company well, it\'s necessary to do so.
Never fear of firing people - the resources for each company is limited. It\'s critical to have the best people, or at least the suitable people.
Trap #4: Sloppy Accounting
The accounting help you know exactly what is going right or wrong with your business, so try do do it properly. You should be able to control your cost and profit; therefore, you need the basic accounting knowledge to make your goal clear and achievable. For example, you need to understand the ratio of sales to expenses that will result in profitability. Thanks to that, you are able to say, "This business needs to make $800K revenue to receive $100K profit." instead of merely saying, "I hope I can make $100K a year."
Do your accounting properly and it will help a lot with your business goals setting and achiveing.
Trap #5: Standard and Control
Business relies heavily on standard, and you need to set the standard for each area, to be persistent in following your standard, especially in quality control, customer service and the company\'s public image. If you identify any problem, fix it right after to prevent any serious damage.
Remeber the rule: Apply standard, control operation, and fix problem
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I am the economic expert and analyze the economic situations in the world. Currently, I often address lectures on economic solutions to students and supply advice for companies and firms.Articles Source: Small Entrepreneurs: Beware of Business Traps