Stupid Business Mistakes
We all make 'em...
This site is a resource to allow you to learn from others' mistakes!
If you have a story to tell about a stupid business mistake that led to a
valuable lesson, please email it to me (put SBM in the subject line) and I'll
post the best stories here, with a link back to your site. (Anonymous
postings also accepted.)* Updated through December
This page also links to my Virtual Law Office web pages,
various small-business & internet business sites.
Index: My Links,
Other Links, The SBM
Special - SBM #2
-- 19 Tips to Protect IP from Computer Crime.
Special - SBM#3 -- 10 Tips to avoid identity
Special - SBM#5 --
14 Points to consider: loans for small
Ralph Fucetola JD
"Supporting Industry Compliance with FDA and FTC Regulations."
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Stupid Business Mistake Stories Index:
SBM #1 - Don't go
into business with the wrong partner...
SBM #2 -
Computer Scum: Protecting Your Business
- Tips to Avoid Identity Theft
SBM #4 - Trusting professionals...
SBM #5 - Loan Sources for Small Business Homeowners
SBM #1. 04/25/03 - A stupid business mistake is to
go partners with someone who does not agree with your values about life and
concepts about business. A more stupid mistake is to go into business with a close relative (as I did)
when you don't agree on the values and concepts... or don't know that you don't
As a result of a few incidents, my relative and I may never speak again. We
lost more than money when we stopped communicating. It'll very
uncomfortable when we have to go to weddings and funerals. If we hadn't
turned each of our jobs in our construction business into its own little
kingdom, if we had only talked more about our values and concepts in the
beginning, things might have turned out differently.
A real stupid mistake!
Anthony A. Sikora
SBM #2. 06/07/03 - Preventing Computer/Intellectual
or "Computer Scum: Protecting Your Business" - Sharry Edwards,
Includes 19 steps to protect your business against computer attack -
SBM #3 09/12/03 - Tips to Avoid
We pass this on from an email we received today:
Sent: Thursday, September 11, 2003 11:27 AM
Subject: Good Advice
got this from a friend, and send it along because I do agree that it is good
advice. In addition, I would advise people not to sign their credit cards.
Instead, write "Ask for ID" in that place. That way, any person who would
try to present the card will have to show a picture ID, and they don't have
your signature to practice forging. Of course it doesn't prevent them for
using it in some other way, nor does it help when clerks do not ask for an
ID. But it is just one more obstacle for a thief to overcome.
A corporate attorney sent the
following out to the employees in his company:
* 1 The next time you order checks have only your initials (instead of first
name) and last name put on them.
* 2 If someone takes your check book they will not know if you sign your
checks with just your initials or your first name but your bank will know
how you sign your checks.
* 3 When you are writing checks to pay on your credit card accounts, DO NOT
put the complete account number on the "For" line. Instead, just put the
last four numbers. The credit card company knows the rest of the number and
anyone who might be handling your check as it passes through all the check
processing channels won't have access to it.
* 4 Put your work phone # on your checks instead of your home phone. If you
have a PO Box use that instead of your home.
*5 Never have your SS# printed on your checks (DUH!) you can add it if it is
necessary. But if you have it printed, anyone can get it.
* 6 Place the contents of your wallet on a photocopy machine, do both sides of
each license, credit card, etc., You will know what you had in your wallet
and all of the account numbers and phone numbers to call and cancel.
*7 Keep the photocopy in a safe place. I also carry a photocopy of my
passport when I travel either here or abroad.
* 8 We've all heard horror stories about fraud that's committed on us in
stealing a name, address, Social Security number, credit cards, etc.
Unfortunately I, an attorney, have firsthand knowledge because my wallet was
stolen last month. Within a week, the thief or thieves ordered an expensive
monthly cell phone package, applied for a VISA credit card, had a credit
line approved to buy a Gateway computer, received a PIN number from DMV to
change my driving record information online, and more.
But here's some critical information to limit the damage in case this
happens to you or someone you know:
We have been told we should cancel our credit cards immediately. But the key
is having the toll free numbers and your card numbers handy so you know whom
to call. Keep those where you can find them easily.
* 9 File a police report immediately in the jurisdiction where it was stolen,
this proves to credit providers you were diligent, and is a first step
toward an investigation (if there ever is one).
But here's what is perhaps most important: (I never even thought to do
Call the three national credit reporting organizations immediately to place
a fraud alert on your name and Social Security number. I had never heard of
doing that until advised by a bank that called to tell me an application for
credit was made over the Internet in my name.
The alert means any company that checks your credit knows your information
was stolen and they have to contact you by phone to authorize new credit.
By the time I was advised to do this, almost two weeks after the theft, all
the damage had been done.
There are records of all the credit checks initiated by the thieves'
purchases, none of which I knew about before placing the alert. Since then,
no additional damage has been done, and the thieves threw my wallet away
this weekend (someone turned it in). It seems to have stopped them in their
The numbers are:
Equifax: 1-800-525-6285 Experian (formerly TRW): 1-888-397-3742 Trans Union:
Social Security Administration (fraud line): 1-800-269-0271
SBM #4 - Trusting professionals...
By: jean blum <email@example.com>
February 22, 2004
Once l opened a retail store, knowing nothing
about retail, my product line besides the completely obvious, nor business
itself. But with common sense, some smarts and research, and the Goddess who
protects the innocents doing her bit, the enterprise took off and flew for 5
years before destruction on the shores of manufacturers' machinations that
upset the entire industry. NOT MY FAULT!!! HOWEVER: The business would have
gone under anyway and here is why:
When my lawyer set up the legal entity l asked for
a recommendation to an accountant. He told me that he really did not know
anyone but there was this "fellow who..." Good enough, thought l, and engaged
"the fellow", who had his "girl" set up a ledger in which l was to enter my
figures... which l was too harried to do regularly...leading to a backed up
pile of papers like you would not believe. Naturally, l never heard from "the
Along came a customer who asked the right
questions, ascertained the situation, offered her services as a bookkeeper
experienced in just this sort of situation, and was hired on the spot. Indeed
she did straighten out the mess forthwith and made the excellent
recommendation (passed along here) to hire a kid in a high school business
course to do the entries on a regular part-time basis: the work is easy enough
for a student to do and minimum wage is a delightful incentive instead of a
So far so good, but l knew l needed an accountant
and "the fellow" wasn't it, so l asked the bookkeeper, whose reply l quote
verbatum: "l know a MARVELOUS accountant. He's my husband."
Again, good enough, keep it in the family, they'll
work together, maybe give me a financial brake... WRONG!!!
The problem was that l did not know what it was
that an accountant was supposed to do. l figured l did not have to know
because the accountant would know. So l asked no questions, he "looked at" the
ledger regularly and billed me...and this is what
he NEVER TOLD ME until much too late:
The business l had chosen was particularly
complicated because the main product line came pre-priced and the mark-up was
insufficient to carry the business, necessitating ancillary merchandise.
So l had a multi-entry cash register and
the figures were accurately kept, BUT he never evaluated the effectiveness of
the merchandise mix, in other words- the bottom line. An impressive amount of
money was coming in, enough to be deceptive but not enough to carry the
business. He never told me, l never knew, and had he done his job l would have
had the chance of carrying a more productive inventory that might have ensured
success. As it was, l had to declare bankruptcy.
The lesson is that it is the responsibility of the
owner to know everything and to supervise the professionals as well as the
help. My shop was run efficiently and l was a strict supervisor, right on top
of everything- that is, everything l knew about. I ASSUMED, and I TOOK FOR
GRANTED, that a "professional" would do the job and do it right. The actuality
is that to assume and to take for granted that others are going to take care
of YOUR business the way you need to have it cared for is the best recipe for
© Jean Blum 2004 - published with
SBM #5 - Not
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*Disclaimer: I do not necessarily endorse the
information posted here. I reserve the right to reject any offerings and all stories accepted for
posting will become the property of StupidBusinessMistakes.com. This site
does not give business or legal advise. Basing your business decisions on
anything you learn here is your own responsibility... but, then, you wouldn't be
in business for yourself if you didn't want it that way!
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