The Four Business Blunders to Avoid

The business jungle can be difficult to navigate.  In the nonstop battery of contracts and paperwork, emails and meetings, sales and purchases, hirings and firings, there are virtually endless opportunities for owners and employees alike to inadvertently damage the companies they work so hard to keep afloat.  With all the effort you’ve put into nurturing your enterprise, the last thing you want to do is hurt (or even undo) your success by making an avoidable mistake.  However, you can’t hope to avoid mistakes if you don’t know how recognize them first.  To that end, we’ve compiled this list of the four worst business blunders to avoid.  No matter what your company does, how many employees you staff, or what your professional mission may be, always take care to steer clear of these business mistakes.

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1. Offending the Public

Step one: create a product.  Step two: sell the product.  Of course, in order to make the jump from step one to step two, you’ll need to advertise your wares.  After all, people who’ve never heard of your product or service can hardly be expected to go out and buy it.

The importance of advertising in the business world is as obvious as it is critical.  But while advertising is always intended to help sell a given product or service, in the wrong hands, a bad marketing campaign can actually have the opposite effect.

Abercrombie & Fitch has been selling clothing since 1892 — but not just any clothing.  Not content to sell to just anyone, Abercrombie & Fitch is famous for the cool, trendy lifestyle its apparel projects.  Or, maybe infamous would be a better word.

In 2006, Mike Jeffries, CEO of the Ohio-based mega-retailer, made news when he made the following comment to Salon: “In every school there are the cool and popular kids, and then there are the not-so-cool kids.  Candidly, we go after the cool kids.  We go after the attractive all-American kid with a great attitude and a lot of friends.  A lot of people don’t belong [in our clothes], and they can’t belong.  Are we exclusionary?  Absolutely.”

Abercrombie has also made the news on multiple occasions concerning offensive t-shirts.  Some of the garments A&F ultimately pulled from the shelves were emblazoned with slogans like, “Blondes are adored, brunettes are ignored,” and, “Do I make you look fat?”

Interestingly enough, Abercrombie recently dropped Jeffries as its Chairman, leaving him with half his original title as CEO only.

The lesson here?  Never bite the hand that feeds you.  If your idea for a new slogan, logo, or ad campaign seems like it could potentially be deemed offensive, it couldn’t hurt to brainstorm an alternative; but it could hurt to go ahead and launch it.

2. Using Bad Contracts

Contracts are the lifeblood of commerce, period.  Without a contract, there are no lights to illuminate your path to a sale, purchase, or just about any other transaction your company could possible make.  Hiring a new employee?  You need a contract.  Purchasing a shipment?  You need a contract.  Signing on a new client?  You need a contract.

In spite of how important contracts are, there are myriad mistakes that business owners make on an alarmingly frequent basis.  Among the worst and most fundamental of these mistakes is failing to produce a contract at all.  Yes, contracts can be verbal, and yes, verbal contracts can be binding — but what if something goes wrong?  What if a contract gives rise to a shareholder dispute, or one company alleges a breach of contract?  Without a written contract, you have no evidence to present in court, and in turn, no way to prove an obligation or discredit a claim.

In addition to the invisible contract, the generic contract is another offender.  Generic contracts which use blanket boilerplate language are often insufficient to cover the nuances and “what-ifs” of your project.  When thousands or even millions of dollars are on the line, turning to Google for a common template is not in your best interests.  Instead, opt for a customized contract that thoroughly addresses the details that are relevant to you — and make sure you have it in writing.


3. Fixing What Isn’t Broken

“If it ain’t broke, don’t fix it.”  Many wise men and women have uttered these seven cautionary words over the years, and business owners would do well for themselves — and for their companies — to heed the adage.

Coca Cola is arguably the most famous drink in the world, and the fizzy brown soda is nearly as famous for its multinational appeal as it is for its cute holiday advertisements, its long-running rivalry with Pepsi, and of course, its top-secret recipe.  No one could blame Coca Cola for keeping famously tight tabs on its intellectual property and trade secrets — Coca Cola alone generates more money in a year than some entire industries.  But despite burgeoning success, in 1985, Coca Cola inexplicably decided to launch “New Coke.”

New Coke proved to be such a catastrophic failure that even today, its name is still laughed at (and grimaced at) miles away from any marketing classroom.  When Coca Cola admitted defeat and returned its classic formula to the shelves, company sales skyrocketed.

4. Social Spillage

Social media is a double-edged sword.  On one hand, you can log onto Facebook, post a message, and, at least theoretically, reach millions of viewers — all for free.  If you feel like shelling out an advertising fee, you can market your business even more aggressively.  And Facebook isn’t the only social media giant that businesses are taking advantage of.  With hundreds of millions of users, sites like Twitter, Tumblr, Pinterest, and LinkedIn are all popular social media hubs for companies from Walmart to Wawa.  A free service with a captive audience sounds like a great set-up, so what could go wrong?

Have you ever accidentally sent an email to a person who wasn’t meant to see it?  Have you ever said something you regret in the heat of an angry moment?  Have you ever tried to make a joke, only to have it backfire catastrophically?  Take a moment to relive the experience.  Now imagine that instead of three or four people witnessing your faux pas, it was three or four million.

Chrysler made the news in 2011 when the renowned auto company sent out this dubious Tweet: “I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to f****** drive.” Late last year, former media executive Justine Sacco made it all the way to CNN for Tweeting, “Going to Africa.  Hope I don’t get AIDS.  Just kidding.  I’m white!”

The backlash was fierce and immediate.  Boing Boing even called Sacco’s crass comment “the Tweet heard ’round the world.”  IAC, Sacco’s company at the time, issued an apologetic statement, saying, “The offensive comment does not reflect the views and values of IAC.  We take this issue very seriously, and we have parted ways with the employee in question. […] There is no excuse for the hateful statements that have been made and we condemn them unequivocally.”

Both Sacco and the employee behind Chrysler’s comment about Detroiters were fired.

At Maselli Warren, our business attorneys have over 25 years of experience helping partnerships, LLCs, and corporations in matters pertaining to litigation, shareholder and partner disputes, breach of contract, corporate collections, employment law, and more.  If you would like to arrange for a confidential consultation with an expert Pennsylvania or New Jersey business lawyer, call our law offices at (800) 891-2657, or contact us online today.