Not Keeping Adequate Reccords
This small business mistake is part of a collection excerpted from Gary Schine's book 101 Small Business Mistakes
Not Keeping Adequate Reccords
Entrepreneurs are not known as being the world's best record keepers. However, record keeping is important for at least two reasons:
1. Records can and should be used to analyze a business's past and to forecast and plan its future. If the business doesn't have good records, the analysis will suffer because of it.
2. Good records are demanded by the IRS, state and other taxing authorities and others such as banks, regulators, and prospective business buyers.
The taxing authorities and other regulators are quite cleat about what kinds of records and documentation are required. By law, you have to at least meet those requirements or you are asking for trouble.
Keeping records for your own analysis is a matter of judgment. But records of various kinds of transactions can be invaluable. Suppose for example, that you want to figure out your best sales areas by zip code, your worst credit risks by industry, the highest profit areas in terms of hours spent per client, etc. Unless you have the raw information to work with, this would not be possible.
You can't know today, exactly what kind of analysis you may want to do tomorrow. Since that is the case, you are better off (within reason) erring on the side of too much rather than too little record keeping.
With the advent of small computers, record keeping can now be easier, faster, and more accurate. Computers, with good data base management programs, also allow for easier and quicker analysis of records.
Other Business Mistakes and Misconcetions
- Failure to Prepare a Business Plan
- Myth-- A New Business Must be Based upon Uniqueness
- Overspending
- Momentum
- Starting a Business for Reasons other than Market Demand
- Entering into Partnerships without Clearly Defined Roles
- Not Putting Partnership Agreements into Writing
- Organizing A Small Company as a Large Company
- Misconception-- A Product Can Be So Good, It will Sell Itself
- Not Understanding Your Product's Benefits
- Believing That Experts Have Magic Answers
- Not Pricing Based on Benefits to Buyer
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