May 1, 2014

Pitfalls Every Small Business Owner Should Avoid

As we approach the 15th Anniversary of BnBFinder.com, I have been reflecting on my career and my time in the Bed and Breakfast industry. I realized that over the past 32 years, since I graduated college, I have only held a “real” job for 18 months (if you define a “real” job as having a boss). Those of you reading this column don’t need to have a boss to legitimize your career –you celebrate the freedom and embrace the hard work and responsibility that comes with running your own business. So do the vendors in our industry – you might not think of us as small business owners, but most of us are. We frequently examine the challenges that innkeepers face, because we face many of the same challenges ourselves. A recent discussion with the B&B Team and Acorn Internet Services yielded some insights that I thought would be valuable to share with you.

No one likes paying taxes. It is completely understandable that small business owners are tempted to run some of their personal expenses through their businesses. This practice might reduce your tax bill in the short term, but when it’s time to sell, buyers want to see a viable business. If you were to explain the tax benefits to the buyer, he or she might then wonder what else you are hiding. My friends often jokingly ask: “Why don’t you write more things off?” The answer is: while I don’t plan to sell anytime soon, understanding the financial health of my business is important to me, so I resist the temptation to write off personal expenses. Whether you are thinking about selling your inn, or if you just want to have a better understanding of your finances, I urge you not to run personal expenses through your business.

Working Off the Books. As a small business owner, you probably speak with many desirable job candidates who would like to or need to “work off the books.” Although the benefit of saving on payroll tax is significant, the cost of being audited is much higher. Also, many employers don’t consider the possibility of their employee reporting them for misclassifying their job, but it happens more often than you might think. Examples of employees who are frequently paid off the books include housekeepers, part-time innkeepers, salespeople, and programmers.

Optimization is Key. Speaking of programmers, consider hiring one (on the books!) to optimize your website for mobile use, if you haven’t already. We are all becoming increasingly reliant on our smartphones and tablets, and that includes guests searching for bed & breakfasts. Yet many inns’ websites are still not “responsive,” meaning that they don’t display well across a range of devices. Lisa, from Acorn Internet and I recently did an analysis of the bounce rate (the % of users who leave a site after visiting just one page) for unresponsive inn websites, and it is very high. Briefly put, an unresponsive site is an obstacle that makes it harder for potential customers to do business with you.

As a small business owner, I understand the cost of doing things right, as well as the temptation to cut corners. There is more to running your own business than just long hours, so give yourself credit for working hard and making difficult decisions. Also, recognize what you can take on and what you need help with. For more insight, please be sure to read Chapter 14 of Running a Bed and Breakfast for Dummies for more information on “Getting Help When You Need It.”

It’s been an exciting 15 years and I look forward to working with innkeepers, quintessential small business owners, and you for the next 15!

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