According to the Bureau of Labor Statistics, 50 percent of all small businesses fail within the first five years. About 30 percent survive only two years.
If you want to be on the positive side of those numbers, there’s a lot of hard work ahead. While every business is different, there are a few major mistakes that are among the most common people make when starting a business.
1. Thinking that all you need is an idea. There’s a lot more. First and foremost is a good work ethic.
The idea is just the beginning. You need to frame all the details of your idea from beginning to end, including game-planning and preparing for ‘what-ifs.’ You’ve got to create a solid foundation that you can build on. If you don’t dot your ‘i’s’ and cross your ‘t’s’ you’ll never get out of the gate.
2. Not having a good lawyer and a good accountant. Starting a business is complicated and rife with landmines. There are laws that must be followed and those include tax laws. The IRS. doesn’t play around.
Make the wrong move or don’t file the right paperwork and you could find yourself in some real trouble. Retaining a lawyer and an accountant with an expertise in your specific type of business cab save you from a serious crisis.
3. Spending too much money too soon. You may have the capital, but that doesn’t mean you should spend it all right up front. You need a balance between investing enough to make sure your business gets off the ground and not overspending before you figure out exactly where your finances should go.
Start slow so that you can get feedback and see results. Put profits back into the business before you expand. More than a few businesses have sabotaged themselves by trying to grow too quickly.
4. Trying to launch while still working elsewhere. The reality is that it’s almost impossible to put the amount of work needed into starting a business while you’re still working elsewhere.
A business needs your full attention to get off the ground. You can develop the plan and start accumulating finances in your spare time while you’re still engaged at another company. Once you’re ready to make the leap, you have to be ready to devote 100 percent of your time to it.
5. Having someone else running things. It’s your business. You need to not only be in charge, but be hands-on with the day-to-day activities, at least to start.
You need to make the decisions. You need to be the one determining agendas, schedules, vendors and an organizational structure. If you have a partner, or partners, you need to create a clear-cut division of responsibilities from day one.
Take things one step at a time. Your passion for your own idea doesn’t automatically translate into the rest of the world instantly loving it.
You need to keep both hands firmly on the steering wheel and make sure every detail is considered and accounted for. Be prepared to work around the clock. Contrary to the popular saying, there is no such thing as an overnight success when it comes to business.
Related: Learn to Survive Setbacks
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