One of my readers recently wrote to me: "Cliff, we love your column. You give lots of good advice, but you dole it out in piecemeal week by week.

Every once in a while, can you pull together some of your pearls of wisdom and summarize them in a single column? It would be nice to have a handy checklist of things to do or avoid."

In the next few weeks, I plan to do exactly that.

As my readers know, I've been working with small businesses — both successful and unsuccessful — for about 35 years now, and I've learned a ton. Many of the lessons I've learned are based on actual experience, not business theory, which contradicts what you read in most small business how-to books.

Here are the first six of 12 biggest mistakes that most small businesses make:

Number 1: Not knowing customer and market trends. Without customers, a business isn't a business; it's a hobby.

It is essential — I repeat, essential — to understand what actually motivates your customers and to see them as real people in the real world. Too many small business owners believe that if they build it, they will come, without really knowing whether that will happen. They should be asking themselves, what emotional and psychological triggers will their products and services generate to drive people to their door or website?

Too many small business owners assume that their customers will always do the right thing as long as they are given a chance. We would all like to live in a world where everybody acts in a selfless and moral way, but that is not the world we live in. If we lived in such a world:

—People would be delighted to pay a premium price for a superior service.

—People wouldn't visit retail outlets to learn about a product, only to buy it online later for a discount.

—Shoppers would always buy organic food even though it's twice as expensive as pesticide-infused genetically modified foods.

—Small family-owned businesses would be able to compete with big-box retailers selling highly discounted merchandise.

It's also important to understand and keep up with market trends. Demographics are constantly changing and it's easy to be left behind. If your website is not mobile friendly, you won't reach millennials, almost all of whom who live on their smartphones. Period.

Number 2: Underestimating the competition. Every business has competition. Sometimes, competition isn't obvious; but it exists. Sometimes competitors are entities or things rather than specific people, such as a new technology that makes your business model obsolete.

Dismissing an upstart competitor can be a huge mistake. An even bigger mistake is not doing everything you can to legally crush a competitor before it grows even more.

Number 3: Not standing out in the marketplace. Businesses that employ a me-too business approach are seldom successful unless they have another competitive advantage, such as a better location, home delivery services, Spanish speakers or lower prices.

In these days where peoples' attention spans are declining, it is more important than ever for your business to stand out from the crowd. As P.T. Barnum said, "there's no such thing as bad publicity."

Number 4: Paralysis by analysis. This is an especially difficult challenge for people who try to be entrepreneurial after a stint in corporate America.

Employees at large corporate companies are pressured to get every last detail right before taking action; they have meeting after meeting with their team to consider problems from every conceivable angle and come to a consensus before making a recommendation to their boss.

If you run a small business like that, you will get clobbered.

By the time you have thoroughly analyzed the pros and cons of taking a new course of action, the opportunity will have already passed you by. Being the first to market is often the key to successful brand recognition. Entrepreneurs act on imperfect information, for better or worse. This is what taking risks is all about; it's also one of the many reasons nature gave us liquor.

Number 5: Poor or unrealistic financial planning. Big companies are all about earnings and profits, whereas small businesses are all about cash flow. Underestimating how much cash you'll need to put into a business before it breaks even and becomes profitable is a fatal mistake. What's even worse is putting money from your personal assets into a business and then realizing that you're going to fall short.

Number 6: Weak, unfocused or indecisive leadership. You don't have to be a bullying chest-thumping alpha male or female to run a business; but you can't be everyone's best buddy either. One of the biggest road blocks to success in any field is the desire to be loved. When you know something needs to be done, you have to do whatever it takes to get it done. Being overly gentle won't get you there.

I will share more pearls of wisdom next week.

Cliff Ennico ([email protected]) is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.

Photo credit: Asian Development Bank