Note: This is a guest post by Jim Muehlhausen, author of "The 51 Fatal Business Errors and How to Avoid Them." Jim has mentored business owners around the world, and we're excited to feature him in today's blog: Lately, there seems to be a great deal of friction between lenders and business owners. Business owners desperately need funds to grow and lenders have tighter underwriting guidelines. This combination is creating a great deal of banker resentment in the business community. In fairness to our banking friends, I see a great deal of confusion as to what a bank is really supposed to provide for a business. A bank is not your partner. A bank is not an equity investor or your Aunt Edna. A bank is nothing more than a VERY fussy investor. What banks want is no secret: Banks want low risk business loans. Of course, this definition of risk is where entrepreneurs and bankers tend to differ. Banks think accumulated assets equal low risk. Business owners think that profitability and owner character equal low risk. Unfortunately, the business owner has the golden rule working against them on this one. She who has the gold makes the rules, and that is the bank. Play by the bank's rules and you will be rewarded with inexpensive capital. Give the bank what they want and they will be your best investor, albeit fussy. Where else can you find 5% capital? It sure beats the daylights out of 30% accounts receivable factoring, right? Let's get to the how part. The best way to give a bank what they want is to create the best running business you can. In my travels, I have seen many fantastically-run businesses and some not-so-fantastically-run businesses. There are best practices and lessons in both. My book, The "51 Fatal Business Errors and How to Avoid Them" addresses these. I have included five of my favorites in condensed form below. Fatal Error #1: Hiring Your Competitors’ Rejects When you hire experienced people, you are really hiring your competitor's rejects. Trying to hire pre-trained employees from other companies, especially your competition, is a disaster. You are probably making an incorrect assumption, that your competitor will let a truly great employee leave. I believe that you should completely give up on the hope of hiring experienced people and instead start with inexperienced, high-aptitude employees. Once you have identified the high-aptitude people, train them to handle the specifics of your business. it's the old Sam Walton saying, "I can teach you to run a cash register, but I can't teach you how to smile." Aptitude is discovered by testing, so stop using your gut to hire. It is not that accurate. Fatal Error #3: Failure to Act like a Benevolent Dictator Webster's defines benevolent as "marked by or disposed to doing good," and the dictionary defines dictator as "one holding complete autocratic control." Being an autocrat does not automatically make you a jerk. Business is not a democracy. It is nice to get employees to “buy-in,” but what do you do if they don’t? Here's what: You run your business in a kind, democratic, and fair fashion. If that doesn’t work, and on occasion IT WON’T, you need to be a dictator. Please be benevolent, but be a dictator when needed. Managing employees is much like parenting. Employees may not like what you do, but you need to do it anyway. Many CEOs are afraid to be anything resembling authoritarian, even just a little. However, I will take an authoritarian leader over a democratic one any day. Just because you are a bit authoritarian does not mean you cannot be nice. Remember, it is your name on the door, not theirs. Fatal Error #16: Wearing the Dog Collar Every business owner dreams of the day a $50,000,000 check slides across the table. I’ve seen checks with a lot of zeros slide to my clients; it is great! By the same token, I have seen many talented entrepreneurial CEOs bogged down in a moderately profitable business. They work too hard for their money and are not satisfied with the work. Any CEO who is underutilized and working at a level below their true value and skill level is, as I am inclined to describe them, “Wearing the Dog Collar.” Whether we like it or not, all of the daily work we perform has a dollar value. When the black hole of "the work" sucks us in, the work we do rarely has a high value. Escape the Dog Collar and you can instantly double your profitability. Fatal Error #26: Turning Racehorses into Plow Horses People who are dedicated and value-driven will do whatever you need them to do. Even if you do not, or cannot, calculate the opportunity cost of having them performing jobs that they are over-qualified for, consider this, when talented and driven people are assigned tasks that do not challenge them, one of two things happens: One They quickly become bored with the work and their frustration leads to them leaving you. Now not only have you lost a talented racehorse, but the plow is now sitting on the field going nowhere. Each of these facts has a cost, and depending on the size of your company, the next horse to pull the plow may be you! Two They become so disillusioned that they grow apathetic and cause issues at work as their performance slips. The fields are not being plowed correctly, the rows are running with the grade of the hill, and yields are down. This option can be much worse than the first, as they are now infecting others in the organization and can be a cancer eating away at your culture and profits. Fatal Error #27: Do They Graduate or Quit? When it comes to employees, there are only two kinds of companies: those who graduate their employees and those whose employees quit. This is a bit of forced polarization as it ignores the mass of employees in the middle. That said, the steady masses are not what make your company succeed or fail. The superstars, or lack of them, will most likely determine your company’s level of success. Companies with great training tend to graduate employees, and companies with poor or non-existent training tend to have employees quit. Which are you? Jim Meuhlhausen About the Author Jim Muehlhausen is the author of The "51 Fatal Business Errors and How to Avoid Them." He works with entrepreneurs around the world, helping them improve their business models. You can learn more about him at the 51 Fatal Errors Coaching Club, the Business Model Institute, or follow him on Twitter at @Mule_Kick .