There are so many pieces both offline and online on how to run a business. Few people have written extensively on NOT how to run a business. There are so many ways of not how someone should run a business and this piece highlights just a few.
In most cases, when a business collapses, people would rush to blame factors such as high cost of living, low purchasing power, high cost of doing business, taxes, among others. Most will fail to look into themselves and see where they failed.
Running a business is not a walk in the park. It needs commitment and the will to always move on no matter what. But sometimes things just refuse to work out and you have to shut down the business. Nobody starts a business with the goal to fail.
Before shutting down your business, this is how not to run a business:
Using your business bank account as your personal bank account
There is a reason why banks came up with “business accounts” and “personal accounts.” Who are you to turn that around and make your business account the same as your personal account?
Your business account should not be the one you rush to withdraw cash to every time you feel like it. It should not be the account you rush to withdraw to buy groceries. It should be your business account and that should be it.
Many businesses fail because their owners don’t give their accounts time to breathe. Cash is always checking into the account just to say hi to the tellers as it moves out to other things that have no business with the business.
Not keeping records
This is more common among small and medium enterprises (SMEs). You cannot run a business “freestyle” and expect to succeed. How will you even approach a bank for a loan with no records?
It is good to keep records. Have an accountant even if it is on a need basis and let them help you keep records and track your transactions. Do not run your business “by the grace.”
In the era of mobile and digital banking, it is easier to track and document payments than before. There are also many tools developed to help one keep records in the clouds.
Not paying your employees
How do you expect your employees to work if you are not paying them completely or on time? If your business depends on employees to function, then you have to look after them.
Your employees are your first customers. They are not your as slaves or just to be seen. You will be shocked just how much power they yield to your clients. Treat them well and they will treat your business well.
Taking loans, facilities, and overdrafts without a plan
Loans are so sweet by the way, especially if your bank is willing to give it to you. But why would you take a loan or an overdraft without any plan?
Many SMEs have been messing up their businesses because of rushing to take loans without a plan on how that loan will bring in more cash to pay itself back.
Take a loan only if you want to invest. There is a saying in Africa that says, “no loan has ever multiplied by being invested through the stomach.”
Mixing business with friendship
Your business doesn’t know your friends. It only knows them if they are coming to support you. If your friends are always taking “out of your business” and “bringing in” nothing, it is time you checked on the circles you keep.
You cannot use your business to entertain your friends and expect to be the best in town. No. You will be going down within no time.
Not paying taxes
Nobody loves paying taxes. If it were up to us, taxes would be a thing of the past. If your business is in a position to pay taxes, please do pay. Not paying taxes seems convenient for a while but the law always catches up.