101 Dumb Financial Mistakes Business Owners Make and How to Avoid Them

By Ruth King

Many business owners downplay the importance of managing their finances—until they’re in trouble. 

When a business can’t meet payroll and supplier bills are overdue, when a loyal customer leaves and there’s a huge tax bill looming, that’s when owners discover the 101 Dumb Financial Mistakes they’ve been making. 101 Dumb Financial Mistakes and How to Avoid Them helps business owners prevent these mistakes before it is too late and they are in the middle of a financial crisis. 

Ruth King’s 101 Dumb Financial Mistakes and How to Avoid Them reveals common mistakes that can happen in any business: from pricing and Profit & Loss Statement issues to theft and Balance Sheet mistakes. With over 40 years of experience working with business owners, Ruth King has seen these mistakes repeatedly. She created 101 Dumb Financial Mistakes and How to Avoid Them as a resource for business owners to avoid many common mistakes by providing them the tools they need to avoid sleepless nights and worry. 

• Language: English
• Publisher: Morgan James Publishing
• Release date: Sep 5, 2023
• ISBN: 9781636980478

Ruth King

Profit & Wealth Guru Ruth King has a passion for helping businesses build wealth, achieve their goals, and stay profitable. She holds an MBA in Finance from Georgia State University. Ruth is the author of two #1 best-selling books, Profit or Wealth? and The Courage to be Profitable. She is a frequent podcast and radio guest discussing how to demystify the financial side of businesses. Ruth resides near Atlanta, Georgia.

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DUMB MISTAKES:

General

These are common mistakes that are not related to your pricing, profit and loss statement, balance sheets or theft.

1

Believing That Profit Is a Bad Word

Some business owners are ashamed to make a profit. They think profit is bad. As a result they don’t price profitably, and then they struggle. They work themselves harder than they would if they were employees of another company. The lack of profit causes cash flow problems, and they experience sleepless nights and stress.

Profit is necessary for business survival. Even lifestyle businesses, which focus more on cash than profits, need profitable revenues. Those profits are turned into cash to support the owners’ lifestyle.

For transformation businesses that are exponentially growing, profit is not as important as cash as growth expands. When Jeff Bezos was starting Amazon, he stated that he didn’t care if the company ever made a profit. What he did watch was net cash per hour (rather than net profit per hour). He had to make sure he had the cash to grow. Profits came later. Pricing must eventually incorporate profitable revenues, or the company can implode if it stops growing.

What is profit used for? First, it must be turned into cash. Cash is necessary to fund payroll and other business expenses. Profit is used to fund growth, increasing salaries, increasing inventory (if you have inventory), and increasing overhead expenses. Without sufficient cash, businesses will die.

How much profit is too much? That answer is totally up to you. It depends on your growth goals, your giving goals, and what you want out of your