There is a lot more to being in business than most people realize. You have to deal with everything that the average worker doesn’t have to. Irate customers, missing inventory and thin profit margins are all par for the course. Another problem is deciding if taking in money is bad business in certain circumstances. In other words, you may have a potential source of income, but you feel that doing so wouldn’t be the best thing. But you also need all the money you can get, so what do you do?
Before you can answer that question, you have to define what constitutes bad business in the first place. A fair definition would be that bad business is any that will cost you more in the long run than you take in. A few of the ways it can cost you is in lost customers, time, money or other resources.
According to this definition, it is actually less profitable to engage in bad business, even if you could use the money it brings in right now. You need to look at the bigger picture and further into the future to see how any deals or transactions may eventually pan out.
The tricky part is that you can’t always tell for sure. Let’s say a con artist comes in and offers to repave your parking lot for an incredibly low cost. At this point your gut will be sending you signals, but the con man is hoping your desire for a good deal (the con will say they’re just taking advantage of your own greed) will overpower your gut feelings. Don’t let that happen and follow your gut instinct.
Of course con men aren’t the only source of bad business. A lot of what turns into “bad” stuff is the result of a lack of communication. This can end up costing you a lot more in the long run. You will think you are conducting good business, but then the misunderstanding will present itself when you least expect it. There can be hurt feelings on all sides, and they can last for years if you don’t do something to fix the problem right away.
The truth is that you won’t be able to avoid “bad business” 100% of the time. But you can save yourself a lot of hassle by sticking to some guiding principles when running your business. I once applied for financing at an auto dealership, which isn’t a big deal. What happened next really surprised me. The guy in the finance department told me a “secret” to dealing with credit agencies. In effect, he was telling me how to cheat the system. He was probably thinking I would appreciate his “help”, but I didn’t. I was grateful, however, because he let me know what kind of dealership I would have been doing business with. Needless to say, I took my business elsewhere.
What’s the moral of the story? To do your best to stay fair and honest, and to never purposely do bad business with those who don’t care about being fair or honest.
