Starting a new small business is exciting. It takes skill and faith to get a new business up and running. Even if you’re an expert in your chosen field, you’re not guaranteed to find success. By avoiding five common pitfalls, new small business owners can further their chances of finding success.
1. Planning is a Necessity
A new business venture may start out as a dream in your head, but in order to be successful it needs to grow beyond that. Create a specific and targeted business plan in the initial stages. Also make a financial forecast, considering the obstacles the new business is likely to encounter. A profit and loss forecast and a break even analysis are also useful tools. Any prospective business owner who is unfamiliar with these types of financial planning might want to consider bringing in a financial consultant to help them create viable and realistic projections. Once these are in place, the trick is to stick with them. The success of your company may depend upon it.
2. Borrowing Large Amounts of Money
When starting up a small business, expenses are unavoidable. However, it’s not a good idea to start your business with an enormous load of debt. Use savings instead and when the business needs an influx of cash, think about getting no faxing payday loans. These smaller short term loans can see your company past any financial hiccups without making you or the business responsible for a ton of new debt. These payday loans are easy to manage and take only a week or two to pay back, just long enough to get you through an immediate crisis.
3. Don’t Go on a Hiring Spree
Most new businesses cannot support several employees. Even if you feel overworked, it’s not necessarily the right time to bring on help. Hiring an employee is an expensive prospect. You’ll have expenses like workers compensation insurance and unemployment taxes. You’ll have to pay a salary and learn how to deduct state and federal taxes as well as Social Security and Medicare. A few employees are a whole new world of responsibility. Don’t take the step unless it’s absolutely necessary.
4. Dealing with Unrealistic Expectations
A new business venture begins with optimism. The entrepreneur sees nowhere to go but up. Unfortunately, this is not a realistic outlook. Any business may suffer setbacks. Don’t expect to earn a profit for the first year or two and have a contingency plan in place in case things don’t go as planned.
5. Don’t Make Decisions without Research
Deciding on a course of action such as how to market your new business or whether to rent new office space can seriously affect your business. Avoid rash decision making. Take your time and review all of your options before deciding on a course of action.
Success with a small business takes dedication and skill. Avoid these common mistakes and your chance for success will increase.