25 Bad Business Practices that Could Get You In Trouble

25 Bad Business Practices That Could Get You In Trouble

There’s tons of expert advice out there telling small business owners how to be successful. But what about the habits and practices to avoid?

If you want to make it as an entrepreneur, you need to create sustainable practices that allow you to create long-term growth. But many business owners have fallen victim to their own bad habits.

Bad Business Practices

Here are some of the top bad business practices to avoid if you want to build a successful business.

Break the Law

It should go without saying that small businesses should always try to operate within the law. But many try to cut corners and end up paying the price, either by losing customers, paying fines or even serving jail time.

Wing It

Small businesses need at least a general plan to operate. What are your goals? What is your business structure? How do you plan on attempting to achieve those goals? You can always make adjustments as you go. But simply going with the flow will likely leave you off-track and disorganized.

Stubbornly Stick to Your Plan

Once you have a plan, you should leave just a little room for adjustments along the way. You’ll likely learn new information or find out what tactics work better than others. So don’t just stick with something based on some ideology that you’ve since proven wrong.

Spread Yourself Too Thin

About 43 percent of small businesses try to handle all of their marketing in-house, many just as one-person operations. But industry leaders believe that this tactic can spread small businesses too thin and harm the effectiveness of marketing efforts. In fact, this concept can apply to plenty of other areas as well. Even if you don’t want to spend the money on hiring or outsourcing, you can often bring in a lot more if you do so intentionally.

Hire Without a Plan in Place

However, if you’re going to hire or outsource, you need to make sure it’s going to actually help your business. Do you have the extra money to pay a team? What will they provide for you that you can’t accomplish on your own? How will their contributions affect your bottom line? You should be able to answer these questions before bringing on new team members.

Micromanage Your Team

Once you have a team, you should be able to trust them to do their jobs. That’s why a good hiring process is so important. If you try to do everything for them or change their work, they’ll end up dissatisfied and you won’t even save any time in running your business.

Only Focus on Your Own Business

Lots of business owners tend to keep blinders on and focus only on their own work. While it’s good to be focused, you still need to keep an eye on the landscape of your industry and your competition. There may be new trends or initiatives out there that impact your operations.

Try Out Every New Trend or Platform

However, you don’t need to jump on every single trend that’s out there. Just in the world of social media alone, there are hundreds of general and specialized platforms available, and new ones popping up all the time. You’ll spend way too much time and energy pulling your team away from the platforms and initiatives that are proven to work if you decide to try out every new thing.

Tell Customers Whatever They Want to Hear

Businesses always want to deliver positive messages to customers. But if you’re saying something that isn’t true, your customers will eventually find out. And they’ll likely be more angry than they would have been if you were just honest upfront.

Endlessly Promote Your Products

You have to promote your products or services sometimes if you want to build a successful business. But if that’s all you ever do on platforms like social media, customers will get disengaged and many will decide not to follow you. You can make more of an impact by providing actual value and mixing in a few promotional posts.

Make It Difficult for Customers to Contact You

You might not want to be constantly bombarded by phone calls, emails or live chat requests, but you need to have some options for customers to get ahold of you if they have questions. This can help them feel more comfortable about purchasing and help you respond to any issues they might have.

Mark Up Products Unnecessarily High

Some markups are necessary in order to run a profitable business. But if you take advantage of customers in vulnerable positions or take part in practices like profiteering, people will notice.

Sell Products Before They’re Ready

It’s true that you might tweak products here and there through the years. But you should do at least some testing for your items before bringing them to market. At the very least, make sure they’re safe and able to live up to any claims you’ve made. If not, you could be open to liability issues.

Don’t Research Your Vendors

The suppliers and vendors you do business with can make a major impact on your success. Not only do you need to make sure that they’re providing quality products and services at fair prices, but you should also make sure that their business practices are ethical and safe. Otherwise, your business could be pulled into a controversy.

Be Irresponsible with Sensitive Data

By 2021, it’s estimated that cyber crime will cost the world more than $6 trillion. For a small business, even a very small fraction of that to make up for lost customers and data recovery can be devastating. Not to mention, customers don’t want to hand their personal information over to companies they cannot trust.

Defame Your Competition

In some cases, it might be beneficial for you to position your products or services against that of your competition. But you should avoid making refutable claims about competitors, as it could open your business up to legal issues. This type of advertising or marketing often comes across as petty to consumers anyway.

Interrupt Clients or Team Members

As a business owner, you should always be listening for good ideas from those around you. Don’t assume that what you have to say is more important. And don’t be rude to others, or they won’t be likely to share valuable insights with you in the future.

Show Up Late

Similarly, you should always value the time of those around you, including clients, vendors, partners, and employees. If you schedule a meeting or event for a specific time, honor your commitments. And those around you will be more likely to do the same for you.

Only Focus on the Bottom Line

Small businesses have to constantly be concerned about finances. But sometimes, spending a little money can be beneficial. Don’t hold onto your pennies so tightly that you stifle chances for growth, especially when it comes to things like cutting employee hours or pay to the bare minimum.

Completely Ignore the Bottom Line

You can’t hope to keep your business up and running if you don’t have any money coming in. In fact, 82 percent of businesses that fail do so because of cash flow problems. So while you shouldn’t necessarily cut every little thing just to line your pockets more, you do need to keep an eye on the books and make necessary cuts every now and then.

Expect Your Employees to Live Up to Unreasonable Standards

Your team is ultimately a reflection of you. You should want them to work hard and show dedication. But don’t expect them to do anything that you’re not willing to do yourself. Lead by example instead of making constant demands.

Don’t Track Employee Productivity at All

However, you also need to hold people accountable to some standards. If your requests and goals are reasonable, you should have a system for tracking employee productivity as well as incentives and disincentives for meeting or not meeting those goals.

Cover Up Errors

All small business owners make mistakes. When this happens, own up to it. People will respect you more than they would if you try to cover it up and get exposed later on.

Blame Others for Your Mistakes

Additionally, you should take accountability for your part in any errors. Ultimately, you can learn from these issues. So it’s not about playing the blame game. But you should make sure everyone understands what went wrong and why so you can fix it going forward.

Quit When Things Don’t Go Your Way

Lots of things will go wrong over the course of running your business. If you decide to cut your losses at the first sign of trouble, you’ll never make it. Instead, have contingency plans and be willing to pivot if necessary.

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Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends and has been a member of the team for 12 years. Annie covers feature stories, community news and in-depth, expert-based guides. She has a bachelor’s degree from Columbia College Chicago in Journalism and Marketing Communications.