We’ve all witnessed some businesses doing all right, but close their doors because they’ve big mistakes in management, pricing, or costs. Here are some examples of how these issues eventually become a problem and how you can avoid an untimely demise.

Taxes

It’s a necessity to stay ahead of the tax rules if you want to continue making sound business decisions. The taxes you should pay attention to the most include property taxes, sales taxes, and income taxes. Schedule a meeting with your tax guy when things seem overwhelming. The penalties of non-compliance, particularly with payroll, is astounding, and learning how to make critical decisions with income taxes on the brain can bring a few coins your way.

Pricing

This is probably the trickiest decision you’ll make all the time. If you’re priced way too high, you won’t bring in the numbers. If you set it really low, you’ll probably rack up more sales, but lose money at the end of the day. So how can you go about finding the sweet spot of pricing?

If you’re in an industry where your pricing structure can be easily compared to your competition, room for flexibility is close to none. You can always out market them by creating a sense of urgency so that people buy from you more than they would the other guys. This is the golden route of sound marketing comes into play. Try out new ideas, track their habits, and tweak as you learn more about your demographic.

However, several businesses with patented products have more room when it comes to adjusting their own pricing structure. It’s customary to see entrepreneurs price their product and/or services way too low at first. You should have the courage to start off a tad high and feel out the feedback – it’s better to make deals rather than being seen as a too expensive.

Infrastructure

Humble businesses usually slack in staff, capital, and infrastructure that is mandatory if you want to run a successful business. You must pay for the skills of a well-qualified accountant to track your numbers as well as an experienced CPA. You also need an efficient accounting system, computer skills, and an attorney on call as well as an insurance broker to keep things quiet as possible. Include all of this in your budget.

Accounting

Most small businesses never really account for the total cost of their operation. It’s more complicated than they think. For example, if you’re selling apparel, the amount to ship to your store factors in with the overall cost of your merchandise. It’s even a good idea to track your damages and returns – both of which are big eaters of your profit margin.

If you’re in the business of service, the amount you pay yourself and your employees – don’t forget about benefits, insurance, and taxes – should be included in the cost of doing business.

When you are this finicky with your accounting, you can make better decisions to maximize your gross profits, which is what really matters. It’s not enough to watch your sales – what counts is the profitability from it.

If you start to notice a trend where gross profits are starting to wane, you have to see why it’s happening and how to fix it as soon as possible. It might be the result of pricing, cost, or probably both. Do something about it now instead of waiting at the end of the month – stick to a system where you track your numbers on a daily basis.

Budgets

We all have overhead we have to manage, which at times can be a headache. It includes monthly rent, utilities, office supplies, and insurance. It’s a wise decision to prepare ahead of time with an annual budget. See if your accountant can turn in a budget vs. actual report at the end of each month. This will give you a better idea on where your money is slowing going.

Collections

I would say small businesses have a hard time managing their collection accounts. In several industries, customers want to pay with credit, and especially in service industries, the customer is billed after the business completes the work. You must treat this as serious as possible. Think about working with a reputable credit-checking service, and always use the terms. Ask for money upfront if you feel uneasy about the transaction, or some sort of collateral if you’re going to burning a lot of calories. Even though you might lose a potential customer here and there, it’s better than doing all the work for nothing.

Even if you think you’re on top of your business game, you should still be able to use this post as reminder for all the areas that are hazier than others. If you’re only doing half of what I talked about, you better start working on it now. You’ll surprise yourself at what you can accomplish.