S7E10: The Blind Spots That Could Sink Your Business — And How to Avoid Them

Disclaimer: This content is for educational purposes only and is not tax or financial advice. Always consult a qualified tax professional for guidance specific to your situation.

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Every entrepreneur has blind spots—the hidden mistakes or overlooked details that can quietly drain profits and even destroy a thriving business.

In this episode of Cash Flow with Pam Prior, Pam shares a powerful real-life story of a successful business owner who was blindsided by one costly decision. She breaks down how to recognize your own blind spots and introduces the idea of a “blind spot tax”—the price you pay when you don’t see trouble coming.

You’ll discover:

1. What blind spots are and how they silently affect your business
2. Why they can cost you far more than you realize
3. How to identify and eliminate blind spots before they sink you
4. A simple, proactive way to protect your cash flow and profits

If you’ve ever felt confident in your business only to be surprised by sudden challenges, this episode will help you see what’s coming and stay in control.

Transcript

0:10

Hey, welcome back to the Cash Flow Podcast, where we're continuing to keep it simple. And the question we have that we're gonna answer this week is one every founder asks, which is, what's the one thing that could sink me this year? What's the one thing that could tank my business? And the truth of the matter is, it's not the economy, it's not the environment that you're in. It's not the industry. It's not a pandemic. It's you and it's your blind spots. And I'm here to tell you, your blind spots come with attacks. And I know this because my blind spots come with attacks, but I'm also gonna tell you how to avoid the blind spot tax. So what's an example of this? A great example of this is I have a client who, before I met him, had a gym in a location that was okay. It wasn't the best location, but the gym was thriving. He was making good regular profit and cash flow every single month and down the street. A few blocks was another gym a building that came up for sale that would've been perfect for a shinier gym. Basically think about, better location, more visibility, room for equipment, people could see it from the street, all of those things. And he said, I'm gonna go do that because I know I can borrow money 'cause I'm making enough money and I know I can get that gym and cool, I'm gonna go do that. And then all of a sudden it hit right before I got the call that, oh crap, I have a $30,000 lease to pay each month now. And I, don't know what to do about that. I borrowed some for it and I've got to pay my landlord and now I'm in deep trouble 'cause I don't have anything to cover that cash. The one element he left outta the picture, his blind spot was time. Okay. It didn't occur to him that. It's gonna take a little time before a gym like that gets up and running. So I really wanna have a little more cash put away before I do that thing. It's kind of like, think about buying a sports car on credit and you don't even have a driveway for it yet. Okay. It's sort of that approach. So. How can you avoid this? There are, as I see it, there are kind of three blind spot taxes that jump up for people most often. One is the commitment tax, and that's the one I just explained to you. So he signed a five year lease, so he was stuck with that monthly loan payment for five years, and we had to do a lot of fancy work to dig him out of that situation. And it set back his business probably more than even the five years of the length of that loan. So. Because he had a blind spot. He had to pay a tax, and that tax really was losing a good three to five years of really, really good profitability. And of course then that feeds to his personal dreams and hopes to put money away for his family and invest in other things. So that has a tax, that's got a lot of repercussions, right? It doesn't just stop with, oh, I made a little bit of a mistake. So those, that's one example of a decision where you can have a blind spot. What is another blind spot? And this one I call the overhead tax. So it's easy to see and know, Hey, I'm gonna scale this business. I'm really tired. I need more people, so I'm gonna go borrow some money so I can hire a bunch of people. Take this time off my plate. Yep. That's a great idea. I know it. Boom. And off we go. The thing we forget is that. There is a runway to get people on board to even find the right people, get them on board. There's a runway to get them trained and doing whatever it is we need done. And as we all know, a lot of times our work will grow into the capacity that we've built. So a lot of times we don't get the advantage that we thought we were gonna get. So what's missing with this overhead tax decision? What's, what was missing when. Another client that I worked with said, I'm gonna hire these six people because I know these sales are coming and I need them in the shop to work on my equipment. And then the sales didn't come. That's what we call an overhead tax because now he's got six people he is gotta pay for. They're in there, they're salaried, and he's gotta make the payment, and yet there's no more money coming into the business. So again, we weaved him out of that. But the issue is he didn't stop to look at his blind spot. Which was, I really want this. I want things off my plate. I wanna grow the business. All that's gonna happen. The blind spot was again, around how long is it gonna take to ramp that up, and is it really gonna work? Okay, so that's the second one. So we got the commitment tax, which is you get in, you get locked into something for way too long. There's the overhead tax where you're just not gonna get a return. On the money you've spent in your business. And then there's the actual tax tax, like the surprise tax, I've talked about this before, but taxes, that's the biggest expense in your business once you start to make money, you know, it's like, great, I'm making money. Oh crap, I gotta pay taxes. So it, those two come together and a lot of times that first year that a business makes money come next April, they're like, oh shit, my tax, my accountant didn't tell me I was gonna have a tax bill this year. Well, guess what? Your accountant wasn't looking at your. Bank account all year. You were. So that's another thing you really, a blind spot can be, Hey, I'm profitable, I'm profitable, I'm profitable. And the IRS is just kept out of your line of sight or the CRA if you're in Canada. And this happens over and over and over again. And these are the three most common blind spot taxes. So what can you do? To make sure you don't walk down this road and make the decision that's gonna tank your business. And what I tend to do, or what I challenge you to do is write down the top three decisions you have to make in your business this week as business owners we're making decisions one after another, after another. What are your top three this week? For each one? Write it down and write next to it, what could I be missing? And not just what could I be missing, but who should I talk to, who could fill in the blanks and make sure that I don't have a blind spot. I really challenge you to do that, and you may wanna do it monthly, you may wanna do it quarterly, but it's really important to do, and it's really important to have someone on your team who can help shine a light on those blind spots. I will tell you that in the Keep It Simple Squad, which we have information for, somewhere down below this or on your podcast notes, is where we absolutely shine lights on those blind spots for people. It is a great. Entry point so that you can understand what you might be missing in your major decisions, who can help you see it. The Keep It Simple Squad can help you see it. So click down there and let us help you. But even if you don't do that, still do the exercise please, of just saying, Hey, what are the key decisions I'm making and what might. Blind spots be. We wanna make sure that none of us run into that brick wall. That is one of the three blind spot taxes. You have a great week and we'll see you again on cash flow.