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Shop confidently - 14-day no-hassle return policy
Shop confidently - 14-day no-hassle return policy
You’re working hard, putting in countless hours to build and grow your business, and dreaming of what your business future will look like. Things may feel a bit messy now, but you know that the future is bright.
The truth is, running a small business involves balancing a lot of moving parts, and even the most seasoned entrepreneurs can fall into costly traps that hurt their bottom line. Whether you’re neglecting legal protections or making poor financial decision, these mistakes can lead to major headaches.
The last thing any of us want is some of our precious profit to go towards fixing a mistake instead of towards that dream vacation we’re planning. Which is why, in this post, we’ll cover the top 4 costly business mistakes you might be making and how to fix them so that they DON’T end up costing you.
If your business collects any sort of personal information — email addresses, names, payment details — without a clear and legally compliant privacy policy, you’re not only risking customer trust but also breaking the law. Many businesses don’t realize that data protection laws, such as the GDPR (General Data Protection Regulation) in Europe apply even if you’re a small business and not in said country. A lack of privacy policy can result in fines, legal disputes, and a damaged reputation.
Your Fix: Craft a comprehensive privacy policy that clearly explains what personal information you collect, and how it’s used, stored, and protected. Ensure that it complies with data protection laws relevant to your business.
Your QUICK Fix: Snag one of our Privacy Policy Templates and get your business protected in less than 30 minutes.
Having a clear, accessible privacy policy not only protects your business legally but also builds trust with your customers, showing that you take their data privacy seriously.
Without a limit of liability clause in your contracts, you could be leaving yourself wide open to massive financial risk. This clause essentially caps the amount of money you could be required to pay if something goes wrong in a project. Such as if a client claims damages from a mistake or unforeseen issue. Many small businesses, especially freelancers and creatives, skip this step — assuming everything will go smoothly. But that’s a risky gamble.
Your Fix: Ensure that all of your client contracts include a limit of liability clause. This can drastically reduce your potential exposure in the event of a dispute, setting a reasonable ceiling on any damages you might be required to pay. Like all contract clauses, it’s important that this section is clear and easy for both parties to understand.
Your QUICK Fix: Snag a template from The Contract Shop® to help you integrate these essential clauses seamlessly into your contracts — providing peace of mind and protection against unexpected legal challenges in minutes.
In today’s digital age, your online presence is one of your most valuable business assets. Your website, social media profiles, and other digital assets are core to your business’s branding and revenue. If you haven’t taken steps to protect them through trademarks, copyright, or secure hosting, you’re leaving them vulnerable to theft, hacking, or legal disputes.
Your Fix: If you produce unique content or digital products, consider copyrighting them to prevent unauthorized use. For your brand elements (such as your business name or logo) trademark protection is essential.
Your QUICK Fix: Snag our course, Trademarks on Tap®, to learn how to file your own trademarks and protect your digital assets.
Offering clients payment plans can be a great way to increase sales, but if your contracts don’t specify terms for missed or delayed payments, you’re setting yourself up for headaches (and a majorly costly business mistake!).
Your Fix: Ensure that your terms and conditions outline your payment plan details. Including payment deadlines, the consequences of missed payments, any penalties or fees for late payments, and what happens if there is a default on the payment plan.
Your QUICK Fix: Snag one of our Terms and Conditions templates to ensure that all of your details are covered. In less than 30 minutes you can have your terms and conditions updated and ready to go!
Having these terms in writing ensures that both you and your client or customer are clear about expectations and reduces the chances of disputes.
While the 4 mistakes above are some of the most common and costly business mistakes that we see, there are a few more that we thought we should mention, as they have serious consequences if left unchecked and can be just as harmful.
Many small business owners focus on generating revenue without properly managing cash flow — leading to periods where they struggle to cover operating expenses. Even when sales are strong. Ignoring cash flow is one of the quickest ways to fall into financial trouble. After all, cash flow problems are the top reason small businesses fail.
Your Fix: Implement cash flow forecasting to better plan for highs and lows. Forecasting involves estimating your future sales and expenses so that you can avoid cash shortages and make better decisions about investments or scaling. Accounting software like QuickBooks can automate this process for you — tracking payments, expenses, and upcoming bills.
By staying on top of cash flow, you can avoid surprise shortfalls, keep operations running smoothly, and grow your business sustainably.
Blurring the lines between your personal and business finances is a common, but potentially damaging, mistake. Not only does it make accounting a nightmare, but it can also expose your personal assets to business liabilities. Without a clear separation between personal and business accounts, you risk inaccurate tax filings, mismanagement of business expenses, and serious legal consequences in the event of an audit.
Your Fix: Open a separate bank account and credit card as soon as possible. Keep all business income and expenses completely separate from your personal finances.
This doesn’t just help during tax season — it also ensures that you have a clear picture of your business’s financial health throughout the year. Separating your finances will save you time, reduce stress, and provide better insight into how your business is actually performing.
Many small business owners adopt a “do it yourself” mentality to save money, which often leads to burnout, inefficiency, and even subpar work. Whether it’s handling accounting, designing your website, or managing social media — trying to do everything yourself spreads you too thin and pulls you away from core business activities that actually drive growth.
Your Fix:Outsource specialized tasks that aren’t in your wheelhouse. Focus on what you do best, and leave other tasks to the experts. For example, hiring an accountant for tax season, a virtual assistant to help with administrative work, or a designer for your website can free up your time and ensure higher-quality results.
Outsourcing may seem like a big expense upfront, but it’s actually a cost-effective way to scale your business. You’re paying for expertise that would take you far longer to master, and in many cases, experts can complete tasks more efficiently — saving you money in the long run.
Running a small business is hard work, and mistakes are bound to happen. But by recognizing and addressing these common issues now, you can avoid costly pitfalls and set your business up for long-term success. The more proactive you are in addressing these potential missteps, the better equipped you’ll be to handle challenges, scale your business, and thrive in the long term.
If you’re ready to protect your business from these kinds of costly business mistakes, a great first step to is snag our free No-Nonsense Checklist for Starting a Business. Even if your business isn’t new, this is a great tool for ensuring that your legal foundation is strong and secure — and that you won’t find yourself dealing with any of the above costly business mistakes!
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