Avoiding Financial Pitfalls: Unmasking Small Business's Costly Mistakes

Contributed by SBOC Member:

Pat Miller

Pat Miller

Founder of the Small Business Owners Community

Uncover the Biggest Money-Wasting Blunders and Learn How to Steer Clear for Long-Term Success

Understanding where our money goes (and often where it shouldn’t) is crucial for our growth and sustainability. It’s not just about cutting costs; it’s about smart allocation of our resources to fuel our journey forward. From my personal experience and witnessing my wife’s challenges in her photography studio, I’ve seen how financial missteps can turn into learning curves.

Our community shared their experiences…do you see yourself in any of these answers?
Amanda Reimer

Everyone who hasn’t made a claim with their insurance can comfortably say INSURANCE, because of the fine print and stipulations in order to file a claim your still not guaranteed any help. Then you can operate with a legal and ethical conscious when covered. Besides the obvious I have to say IRS’s double standard of fees making it twice as much for self-employed

Shauna Metten

Everyone who hasn’t made a claim with their insurance can comfortably say INSURANCE, because of the fine print and stipulations in order to file a claim your still not guaranteed any help. Then you can operate with a legal and ethical conscious when covered. Besides the obvious I have to say IRS’s double standard of fees making it twice as much for self-employed

Tina Antonopoulos

When you start anything in life, whether it be a small business, a relationship, a new hobby, I personally don’t believe any money put towards the new endeavor is wasted. It all comes with the price of the journey. Money comes and goes. If it goes, it teaches you crucial lessons to help you evolve and expand. Money coming your way, is validation that your hard work is paying off. I feel all money and efforts spent, brought me to this point in my life-where I need to be.

Nathan Keppler

Thanks Pat, one of the biggest wastes of money I have experienced as a small business owner is hires that didn’t work out.

James Henry

Very simple answer is my time. I do a lot of texts, phone calls, and emails I do for nothing.

Kimberly Peek

The biggest waste of money I’ve had in the life of my business is from software and subscriptions I wind up not using. This inefficiency can come from forgetting to cancel free trials, failure to cancel subscriptions as I consolidate tools, not using the tools due to lack of training or lack of time to learn the tips and tricks, and failure to read the small print when signing up for offers. While software and subscriptions can offer significant benefits to businesses, it’s crucial to approach these investments thoughtfully to avoid waste. By carefully evaluating needs, encouraging adoption, and regularly reviewing what tools are genuinely useful, businesses can ensure that their investments in technology are both effective and efficient.

Andrew Wade

Firstly, I must share the advice I received prior to opening my office in May 2018: as a new business, prioritize finding early returns and investing your money there. Avoiding high rent or mortgage payments was crucial for me, as it allowed me to focus on the true drivers of revenue: marketing and building a strong team. This philosophy became even more evident in the post-COVID world, and I am grateful for implementing it early on as it led to faster profitability. On the downside, I made the mistake of hiring out of desperation, which I strongly advise against, no matter how challenging the circumstances. During COVID, I struggled to find employees and ended up hiring individuals without proper vetting, resulting in wasted time and money. I failed these applicants by placing them in positions they were not adequately qualified for. It is essential to establish a hiring and training process, adhere to it, and trust your instincts. From there, you can either coach employees up or coach them out.

Katherine A. Jones

Hi Pat! Since I own and operate a food manufacturing business, using glass jars, I have ran into several obstacles with raw materials. Since the pandemic this has been an ongoing issue. The last company I purchased these goods from ensured they would continue to have them in stock for the foreseeable future. Only to discontinue selling them six months later! Especially since with my last purchase they required me to buy 1500 of the accompanying lids. However, I was not purchasing that many jars. Now I am stuck with approximately 1100 useless lids. A total loss!

Hirman Ahmad

Working with influencer or content creator I feel has been the biggest waste of money. It’s instant gratification and excitement when a post/reel get posted but it does not leave a lasting impact on the business in the long-term. It can get multiple views or comments but that does not convert to sales.

Leanna Zimmerman

I don’t want my response to come across bad but I would say hiring friends and family in the beginning was the biggest waste of money. There’s a reason that there’s a saying not to do that. I don’t want my answer to reflect everyone who does that or is hired because it works out great for a lot of people – but in my experience, it didn’t work out well with training, buying equipment, travel, and trips for what ended up being a large loss of money in the end. I had a couple of people reach out for opportunities with my business that I was open to helping them with as a friend but in the end, myself and the business only received a loss of time and money from doing so. It’s best to bring people onto your team who you truly think will do well and will benefit the business, and not those who see you doing good and hope that it’ll be an easy ride for them.

Kyle Vitense

Short answer, taxes. The amount I pay as a small business owner and what we get in return is unbalanced. But I understand that is perhaps not the angle you are looking for. Marketing and advertising have been the biggest “wastes” of money, but there are lessons learned along the way. Some fail miserably! Without trial and error, I wouldn’t find the strategies successful enough to compensate for the mistakes.

Avoiding Financial Pitfalls: Unmasking Small Business's Costly Mistakes

I relate most to the theme of impatience costing more than money – it costs us our vision.

Last summer, I rushed to launch an even., I overlooked my audience’s readiness and the timing, leading to a financial setback that was a hard pill to swallow.

What these stories and insights underline is just how easy it is to waste money. And, it’s not just about tangible expenses; it’s the intangible – time, energy, and missed opportunities – that often weigh us down the most.

Let’s keep the conversation going. What’s your biggest waste of money, and how are you tackling it?

Pat Miller

Contributed by

Pat Miller

Founder of the Small Business Owners Community

Pat spent two decades in broadcasting management and hosting. After leaving the radio industry, he spent time consulting small businesses and realized the support system for entrepreneurs was broken. Where could you find help for improving small businesses and building real connections with other like-minded people. In June of 2020, the Idea Collective Small Business Community was born.