So, you’re ready to strike out on your own as an entrepreneur. Congrats! You’ve made a brave decision – one that could solidify your financial future. To increase your chances at entrepreneurial success, however, it’s important to take a look at the past. Remember that many others before you have embarked on this same entrepreneurial journey. Here are just a few mistakes they’ve made that you'll want to be sure to avoid ...
TAXES – When you start a business, your taxes start to get more complicated. Don’t wait until April to get blindsided by the fact that you owe more than you thought you did. Plan ahead by meeting with a tax professional well before tax season so you can set aside the cash you need to pay Uncle Sam.
DEBT – If you’re an entrepreneur, you’re already under enough pressure to make your business successful. Don’t add to that pressure by borrowing excessive amounts of money from banks that you’ll have trouble paying back. Whenever possible, use your own savings to get your business up and running. Only borrow what you absolutely need. Remember, just because you’re approved for a certain loan amount, that doesn’t mean that’s the amount you should borrow.
OVERHEAD – Thinking big is fine. Renting a big, fancy office and hiring a huge staff before you can truly afford to do so is another matter altogether. Make a concerted effort to keep your overhead as low as possible for as long as possible or you could find yourself underwater financially. It’s all about keeping your “burn rate” low.
INFLEXIBILITY – While it’s important to have a business plan, it’s equally important to recognize that plans change. As you learn more about the business you’re in and the competition you face, it’s imperative that you remain adaptable. In fact, for some new businesses, being open to change is the only way they can ensure they remain open for business.
LACK OF FOCUS – As an entrepreneur, to say that you have a lot going on is an understatement. Avoid being pulled in different directions by giving your undivided attention to your most important tasks. Instead of constantly looking for new ways to add customers, identify what’s already working and redouble your efforts in those areas. Finally, don’t let small details keep you from losing sight of the big picture.
OVERCONFIDENCE – You started a business because you thought it was a good idea. That doesn’t necessarily mean that consumers agree with you. Conduct some market research to see how your product or service is perceived by your potential customers. Make sure they want to sell what you’re buying. If they don’t, it’s time to rethink things.