If you have an inspiring vision and boundless enthusiasm for your business, we want to see it take off! Even the most successful corporate giants started small and humble, and they faced many pitfalls along the way. Even intelligent, savvy business owners are at risk for falling into these old and dangerous traps. Luckily, you can protect yourself by anticipating common problems and taking steps to avoid them. Study up on these business mistakes that can lead to financial disaster to make sure you can guide your business confidently past them and onward to success.
Room for Growth
Many new business owners make the mistake of starting too big. Of course you should have grand visions of success for your business, but you also have to start with the reality and build up. Don’t let yourself (or your wallet) get hung up on getting everything just right before you open the doors. Rent a space you can afford and keep decor and materials modest at first. As your business grows and profits increase, there will be plenty of time to upgrade and upsize everything until it matches your wildest visions — but start small to ensure that your business has the legs to get you there.
Keep the Books
With so much going on and so many important things demanding your attention, it can be easy for inexperienced business owners to put off balancing their financial records. This is a huge mistake. It can be tedious, but tracking your business finances meticulously is hugely important. It helps you understand where you are and what you can afford, alerts you to opportunities for growth, and makes sure you see the warning signs if you are headed towards trouble. If you know financial records aren’t in your skillset, it’s worth it to hire an accountant or invest in financial account keeping software like Quickbooks.
Many businesses are born with a significant contribution from the business owner’s own finances. In fact, it’s difficult to find the necessary funding any other way, and including a personal investment can even help you secure small business asset financing. You need to be careful, however, to keep the lines between business and personal funding clear. If you don’t identify your business as a separate entity from your personal finances, you risk losing all of your personal assets if the business gets into trouble. Even if it doesn’t come to that, taxes are a nightmare when the business and personal expenses are carelessly muddled.