When giving seminars on how to build successful  businesses, I’m often asked “What businesses should I avoid getting involved in?” 

Here’s five businesses to run (not walk) away from.

A “Money Losing Business”  If this is an existing business, it’s where each week/month there has to be a “perfect alignment of the stars and planets” in order for the business be able to make payroll much less make a profit.  Or, if it’s a business in the planning stage, it’s where the revenue projections are pulled out of thin air and then grow dramatically for the next three years for no realistic reasons.

An “I Can’t Count But That’s OK Business”  This is a business where the founder(s) don’t have a clue and, worse, don’t really care, about closely monitoring the cash, accounting and financial aspects of their business.  Rather than starting or running their own business, their goal should be becoming a highly compensated employee of a business that “can count” so they don’t have to.

A “We Believe In People Over Profits Business”  Despite their good intentions, these types of “for profit” businesses will, in time, learn why they should have incorporated as a “nonprofit” organization.  The reason?  A “for profit” business cannot continue to operate without making a consistent profit from its sales of goods or services. A “for profit” business doesn’t have to have a Russian gulag as its business model but it does have to make a consistent profit.  On the other hand, the tax laws give “nonprofit” organizations a huge advantage in being able to “beg for money” from the public, and, in return, give donors a nice tax deduction rather than having to generate all of their revenue and profits from sales.

An “It’s My Dream Come True Business”  While I love to watch passionate people start and run their own businesses, I cringe whenever I see a founder who is so infatuated with their dream that  they forgot about little mundane details like sales, revenues, cash flow, expenses, taxes, etc.  It’s like watching two sixteen year olds who are “in love.”  They make a cute picture but you realistically have to worry about their future.

An “It’s So Easy To Be In Business For Yourself Business”   Many times, this type of thinking (and the resulting business plan) comes from a “wage slave employee” who longs for the scheduling freedom and lack of supervision that (allegedly) come from being your own boss. Sure, having your own business may be “rewarding,” “a great experience,” or “the best thing I’ve ever done,” but I doubt if you’d find a successful business owner who’ll say it was “easy.”  There’s an old business saying that “being able to set your own hours” really means “how many hours am I awake each day?” It’s not for people who want “easy.”