Want to avoid some of the common mistakes that business startups make?
So you are looking at starting up a new business? Then you will want to make sure that you avoid some of the common mistakes that business startups make. These mistakes can ultimately affect whether or not your business will be around for the long haul. We hope that this list will help you in your startup process.
Not Planning – You have to start off on the right path when getting your business started. What better place to start than to get your business plan together. Don’t just jump into starting a new business without having a game plan in mind. In your planning, you need to focus on all areas such as marketing, business structure, budgeting, competition, financial plan, timing of entry and so on. This needs to be a written plan; a “road map” if you will that has clear goals and objectives. Improper planning or no plan at all will leave you and your business lost.
Not Keeping Business & Personal Finances Separate – This should be done for several reasons. First, for proper accounting to flow more efficient there needs to be a distinction between what is personal and what are business expenses. In order to do this, it is best to keep separate business and personal checking accounts. Next, you have spent a good bit of money setting up the business to keep it a “separate legal entity” and if you are mixing business and personal finances, legally it could be taken that your business is not a separate legal entity. So for legal, accounting, and taxes it is a good idea to keep business and personal finances separate.
Not Saving Enough Money – As part of your financial planning, you will need to know how much money you are going to need to get your business up and running. You will also want to look at your personal finances as well. It is possible that you will need to go a few months to a year before you will be able to start taking a payroll out of your business and you should be prepared. All of this can help you avoid having to take on debt.
Not Following Budget & Overspending – Another area of the financial planning should involve coming up with a budget for your business. It is helpful to ask other business owners what are typical expenses you should expect. This will help you to know amounts to budget for as well as give you an idea of some expenses that you might not have thought about. What ends up happening to a lot of new business owners is that they tend to stray from the budget whenever some extra money comes in. This can lead to a new business owner overspending, straying from the budget, and not remembering about their business emergency savings.
Not Seeking Professional Help – Early on it is important to understand what areas of business you are an expert at. Those are the ones that you will want to focus on. Other areas that will take up your time or will ultimately cost you money by doing them yourself, you will want to delegate to a professional. Avoid trying to be a jack of all trades as it will cost you money and will spread you too thin. At some point you are going to need employees, professional help, and advice. Try to recognize this early on in the planning stages and what will benefit your bottom line.
All of the above items will help your new business succeed. If you have any questions on any of the above items please contact us and we will be more than happy to help you out.
We would love to hear your stories on how you have seen people make these mistakes, or how they have helped you and your business out. Please leave us a comment telling your story.