Five Ways You Could Be Killing Your Business

Spending in the Wrong Places

Peter D'Arruda, author of Financial Safari, has some advice for those trying to expand their business on limited funds: "Baby steps are more important than giant leaps. The old story The Tortoise and the Hare could be no clearer: Don't run when you can walk."

Work space: If you're in retail, "Perception is reality, and 'location, location, location' is the common saying," says D'Arruda. But if you can move into less expensive real estate without customers caring, why not?

Employees: "If you need the help and can justify the costs of hiring someone [new], by all means, hire away," says D'Arruda, but he adds that each employee brings about various forms of charges, from Social Security to workers' comp, so you need to factor those in when hiring new staff. "A good rule of thumb is that if you hire someone for $10 an hour, the true cost to you will be anywhere between $16 and $20 an hour after all the employee-related expenses."

Trade shows: "Many business owners get caught up in all the hype and glamour and 'specials' at these events and overcommit and purchase way too much," says D'Arruda. "Overordering can kill a business quickly."

It's helpful to know why you're spending money on items you don't need. You may be a victim of "expertise-creep," according to Jim Stroup, a management consultant and the author of Managing Leadership. It's the same malady that plagues micromanagers. "Entrepreneurs who have had an idea take off . . . sometimes, in the glow of the apparent validation of their wisdom, assume that that wisdom extends into every area involved in the business," says Stroup. "From marketing to accounting to operations and management, your pointed disregard of your friends' and advisors' suggestions can become pig-headed and self-destructive."

Chasing After Every Customer

It's a waste of resources to put all your time, energy and money into chasing after every possible customer. It's the "ideal customers" you should be trying to reach, says Michael Lovas, founder of About People, a Colbert, Wash., consulting and training firm that specializes in helping companies and entrepreneurs better understand, attract and connect with their clients.

Lovas says you should studiously attempt to learn what your more consistent consumers like about the products or services you offer. Make obtaining specific feedback from customers your priority, and whittle all that information down to the top three or five values -- you'll eventually learn the most important quality that attracts customers to your company. "Once you have those words and phrases, you can begin to craft your marketing so that it is targeted specifically to people who value what your product or service represents," says Lovas.

What you really want is for your regular clientele to think of you as a partner in their life, rather than -- to be blunt -- a huckster hoping to make an easy buck off them. Olivia Fox Cabane, author of The Pocket Guide to Becoming a Superstar in Your Field, warns entrepreneurs about "trying to sell customers on anything. It's the fastest way to ruin a client-customer relationship before it even begins. People don't want to be sold to."