The Dos and Don’ts Every Entrepreneur Learns the Hard Way

Entrepreneurship doesn’t come with a rulebook, but it does come with patterns. In a recent episode of Profitability Playbook: The Simple Numbers Podcast, hosts Brandon Gray and Mike Maxson walk through some of the most common and costly mistakes business owners make, and what you should do instead.

They share lessons learned through experience, including missteps. From pricing and labor to hiring, compensation, real estate, and marketing, this conversation delivers practical guidance every entrepreneur can use right now.

Here are the biggest takeaways.

Pricing: Don’t Ignore It and Don’t Be Lazy About It

The Don’ts

• Don’t ignore pricing. Even when it feels uncomfortable, pricing must stay on your radar. Avoiding it quietly erodes profitability.

• Don’t use blanket price increases. Across-the-board hikes may have worked years ago, but today’s markets demand more precision.

• Don’t blindly follow industry chatter. Hearing that "everyone is raising prices 6%" doesn't mean that's right for your business.

The Dos

• Get granular. Evaluate pricing by product, service, or offering. Some items may need increases, others may not, and some may even need to decrease.

• Anchor pricing to data. Look at cost inputs, contribution margin, and what your specific market will bear.

• Be braver than you think. Many entrepreneurs underprice out of fear, only to realize later that customers would have been willing to pay more.

Pricing decisions should be intentional, data-driven, and reviewed regularly, not reactive or avoided.

Labor: Detail Creates Clarity

Labor is one of the biggest expenses in most businesses, and one of the least understood.

The Don'ts

• Don't lump all labor into one bucket. When everything is grouped together, you lose visibility.

• Don't book net wages. Recording net pay hides payroll taxes and distorts your true labor cost.

• Don't rely on your accounting system's default setup. Defaults are rarely designed for meaningful business insight.

The Dos

• Break labor out by function. Separate direct labor, management, sales, and marketing.

• Book gross wages and payroll taxes separately. This gives you clean, reliable financial data.

• Track time. If you don't know where labor hours are going, you can't fix inefficiencies.

The more detailed your labor data, the better your decisions around staffing, pricing, and profitability.

Hiring: Let the Numbers Speak First

The Don'ts

• Don't hire just because your team says they need help. Teams almost never say they're fully staffed.

• Don't assume more people will fix efficiency problems. Sometimes hiring masks broken processes.

The Dos

• Check labor efficiency metrics before hiring. Let the data confirm whether adding headcount makes sense.

• Unpeel the onion. If efficiency is declining, investigate systems, workflows, and workload distribution first.

• Hire for more than skills and culture. Look for traits that truly matter in the role: resilience, grit, and ownership often outperform resumes.

Hiring should solve a clearly defined problem, not just relieve pressure.

Raises and Compensation: Avoid Autopilot

The Don'ts

• Don't give blanket cost-of-living raises. Automatic increases reward tenure, not value.

• Don't let employees outgrow their role financially. People can price themselves out of a position if responsibilities don't evolve.

The Dos

• Base raises on market data and performance. Wage inflation varies by role-treat it that way.

• Tie pay increases to expanded responsibility. If the job grows, compensation should grow with it.

Compensation should reflect market reality and contribution, not habit.

Owner Pay and Distributions: Be Honest With Yourself

One of the most overlooked distortions in small business finances is owner compensation.

The Don'ts

• Don't underpay yourself just to save payroll taxes. It makes the business look more profitable than it really is.

• Don't take random distributions. Treating the business like a personal checking account undermines discipline.

The Dos

• Pay yourself a market-based wage. This reveals true profitability and protects long-term value.

• Set a consistent distribution plan. Monthly or quarterly distributions based on cash flow create stability.

Clear owner compensation leads to clearer decisions-and stronger businesses.

Real Estate: Don't Let a Building Run Your Business

The Don'ts

• Don't buy a building out of frustration with rent.

• Don't assume real estate will automatically improve profitability.

The Dos

• Decide intentionally to become a real estate investor. That's a separate strategy, not a side effect.

• Run contribution margin math first. Make sure the business can absorb the added cost.

• Stay flexible. If the location no longer works, move, even if you own the building.

Real estate should support the business, not trap it.

Marketing: Measure What Actually Matters

The Don'ts

• Don't rely on vanity metrics. Clicks, impressions, and "4x ad spend" mean nothing without margin.

• Don't spray and pray. Untargeted marketing is expensive and ineffective.

• Don't give marketing partners a free pass.

The Dos

• Measure ROI down to contribution margin. Marketing must generate real profit, not just activity.

• Set clear expectations and deadlines. Accountability matters.

• Match marketing resources to actual needs. Many businesses overspend by doubling up on in-house and outsourced marketing.

If marketing doesn't produce measurable profit, it's an expense, not an investment.

Final Thoughts

There are no shortcuts to profitability—only clarity, discipline, and better questions. The recurring theme across every topic in this episode is simple: use data, not assumptions.

When entrepreneurs stop relying on gut reactions and start trusting clean numbers, better decisions follow. And sometimes, as Mike and Brandon put it, if nothing else works, you can always serve as an example others can learn from. If you'd like help navigating entrepreneurship, contact us.