The Seven Deadly Sins—envy, pride, sloth, greed, wrath, gluttony and lust—have long been taught in religious circles. Not surprisingly, there are deadly sins in business, as well. I have seen businesses commit these deadly sins over and over again. Hopefully, if you know what they are, you can avoid them.
Failure to Plan
When a business is new, it can be easy to implement ideas. The owner shares his vision with employees, and things get done. As the business grows, this can be more challenging. Definitive planning must take place.
A plan is more than loosely thought-out ideas in your head, even if you have talked them over with others. For a plan to be effective, it needs to be captured in writing, with items scheduled and a time-line for completion. The plan should include measurable goals and a driver who is accountable to implement the ideas. Plans succeed not simply because they are in writing but because you evaluate and refine them as you move forward.
Cash Flow Problems
Start-up businesses are usually strapped for cash. Even well established businesses can run out of cash, and the changing economy has not helped the situation. It is not enough to rely on historical measures and only check your company's health at year-end. You must continually monitor your business health, including your cash position.
Too often, businesses concentrate on sales, a contract which is usually some type of accounts receivable, and thought of as cash. Accounts receivable is simply that, money you are owed. But until you receive the cash, it has less value to your business and creditors.
Some of the best advice from life's training is to not ever run out of money! Make sure you have sound business practices to avoid problems with cash flow.
Same Marketing Routine
As a business owner, you know something about your services and products. However, it is easy to focus on what you know and sometimes exclude the customer. That is where marketing comes into the picture. Marketing your business is different from selling your product or service.
Marketing establishes your brand, attracts customers, and gets them to contact your business. In prosperous times, the marketing machine tends to shut down; in slow times, companies question whether more marketing dollars will make a difference.
Your approach must be more complex than just tweaking your existing machine, resulting in new and different outcomes with existing customers. Look at venerable industry leaders that many thought were too big to die – RCA was taken over by General Electric; E. F. Hutton (remember the tagline – "when E. F. Hutton talks, people listen") was acquired by Shearson Lehman Brothers, who has now vanished; TWA declared bankruptcy and was taken over by American Airlines; Arthur Andersen – sunk by Enron; Woolworth's closed all locations by 1997 and was succeeded by Foot Locker.
Today NEW BUSINESS is not the same old re-cycled business. Your customers are much smarter than that. New business is new offerings!
Poor Negotiation Skills
Most business people have never studied negotiation skills, and are fixated on a basic style of negotiating. What is usually not recognized is all the times and places you are negotiating: what's for dinner, I need a day off, convincing a spouse to drop by the Mall to look in a store, choices of medical treatment or prescription drugs, let alone buying or selling an asset. Each negotiation has many factors to consider; win-win vs. win-lose, a reoccurring customer or vendor, or keeping a key employee motivated and working.
Negotiation skills are often thought of as something that is learned only with experience. Most universities that have business, law, and government schools have separate courses on negotiation. You can improve your negotiation skills and improve your ability to achieve your goals.
Outdated or Nonexistent Legal Documents and Agreements
You made the effort to form a legal business entity, and now have key employees who are needed for the business to continue. Yet, you are unsure about having a succession plan, holding and documenting minutes, or having insurance in place to address disability or any other unimaginable event that could occur.
Most business people do not have a will, nor do they have the necessary and important legal documents in place to protect the business.
I have had business owners became hospitalized with no one left to sign a check, or a business owner, owning 20 percent of a successful business suddenly die at age 37 with no buy-sell agreement. Your business needs to have the legal ability to continue – beyond your human frailty.
Complacency
As you become more and more successful, it is hard to keep your eye on the ball with killer instinct. It is human nature to look at other choices, options and opportunities – fly fishing in New Zealand or a vacation villa in Spain . Your business is working, staying on course, and you finally deserve a few weeks off. The problem is the few weeks grow to months and your people get mixed signals.
You may have the best skilled and trained managers in the world. But they are not risk takers without your permission. While you are gone, your business is on automatic pilot which works as long as there are no course corrections. Proactive owners and managers successfully steer their companies on a successful course avoiding significant challenges and issues.
Not Passing on the Company Values & Heritage
Companies need a strong culture and heritage that is successfully passed on, a guarded formula like that for Coke that assures future success. Look at the culture of the Native American Indian. The chief would recount the stories and lessons of generations before him. Young Indians as they grew would go through a right-of-passage in order to gain the tribes' respect.
In today's environment, core values and ideals are passed down by traditions, history, study and more. You need to develop within your company core values that teach leadership, and have a plan for your company to succeed.
The current economic realities make it easy to fall into hopelessness with the attitude that nothing will work, so why try. In times like this, you need to watch where in your business you may be allowing deadly sins to creep in.
