Stupid Business Stories

One of the things I really enjoy over at the Smart Business Stupid Business website is something we call “Stupid Business Stories.” We ‘fess up to some of our own mistakes, and also invite people to tell us about what happened, why, and the lessons they learned.

Here’s just a quick sampling of what we’ve received from readers:

When I was 22 I started a telecommunications company. Turn it into a million dollar business in 9 months. Over the next 3 years grew it by 50% each year. Then I was diagnosed (completely unexpectedly) with a life-threatening illness and could no longer physically work within several days. Unfortunately 95% of the business revolved around me and when I couldn’t physically work, the business no longer worked. And that’s when I learned my lesson … There is a major difference between being self-employed and being a business owner. I was self-employed. I now own over a dozen businesses and in each one I’m a business owner. If I’m not there the business does just fine. In fact, in most cases it actually does better when I’m not there! (thanks to Greg H.!)

Went into business with a close friend. Lesson from the story: DON’T GO INTO BUSINESS WITH A CLOSE FRIEND. (Thanks to Chris F.!)

Anonymous wrote in:

A repair business had a customer service person for several years. He seemed like a good guy. Was very good with customers and knew lots about the computer system and the way things ran in the office.

This was all good and well, except for a few things. I noticed the cash in Quickbooks NEVER balanced to the cash drawer. Oftentimes there was a miscellaneous entry on the day’s closing to balance the general journal entry for the day to the cash drawer. I asked several times about this, and the answer was, “we don’t count the change so it’s always off”. They felt it was a waste of time to worry about the change being counted.

There were problems with inventory, too. The customer service guy was the only one who understood what the parts were, but it was like pulling teeth to ever get him to really do anything on the inventory. We made an estimated guess at the end of that year.

Then we noticed he was writing several hundred dollars worth of checks to himself as an “advance” on his paycheck at least every 2 weeks …

By the time I wrote the email to the owner about my concerns with the customer service person, she said he had already left the position. They never were repaid about $1,000 worth of loans he took for himself. But, in my mind, that’s not all he took. What about all the times the cash drawer was off because they didn’t count the change? Why was he reluctant to do inventory? There was a lot of time wasted when he didn’t show up to work and no one was really sure how to fill his spot because they weren’t trained to do the job. I believe this company really lost thousands of dollars because of this employee who was in a key position.

The Lesson here: Don’t place too much responsibility on just one employee. Someone other than the person in charge of the cash drawer should be balancing it at the end of the day. Put better systems in place, and cross train employees to be able to fill in when one employee is not there. And, trust your gut instinct when something feels wrong.

If you’ve got a story you’d like to share, come over to http://www.smartbusinessstupidbusinessonline.com/stupidbizstories/ and drop us a line. You can give us your name, or stay anonymous!

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