Starting a New Business? Here’s 3 Mistakes You Need to Avoid

Rushing starting a new business and getting your business open for customers and making money is something many people find themselves doing as impatience leads to the theme of making poor decisions and overestimating the functionality of their business in the early days, and whether or not they’re actually ready. Wanting to get going and forging ahead with your new career path is good and well, but if you are not ready to begin trading, you will likely only cause more problems than you think you are solving.

This leads to mistakes and can put the first nail or nails in your coffin before you’ve had a chance to build on what you want to do. But what mistakes should you avoid?

Not Having a Business Bank Account

Channeling all of your business income via a personal account or your only bank account can lead to very murky waters. You need a separate business bank account right from before you even make money. All of your payments, both in and out, need to be directed via this account. From here, you can pay yourself a wage or transfer money into your personal account. However, don’t overlook the importance of this step. Not having a business bank account can lead to financial confusion, tax issues, and personal liability. Make sure you open business account sooner rather than later to avoid these potential risks.

Neglecting to Create a Comprehensive Business Plan

Sure, you have a rough idea of what you want to achieve and how you are going to do it. In the early days, this idea is enough to get the ball rolling. But to steer the ball in the right direction and not have it careering out of control once it gathers speed, you need a business plan. A comprehensive business plan is not just a document; it’s a roadmap that can offer direction and guidance, keep you on the right path forward, and help you make informed decisions. It’s a tool for setting goals, making strategic decisions, and managing resources effectively. 

This business plan needs to cover critical aspects of running a business such as financing, market analysis, projections, operational strategies, a competitor analysis, marketing strategy, the business organization and structure and even an exit strategy if things don’t go to plan or you want to leave or sell the business in the future. 

Underestimating Start-Up Costs

Not all businesses will have massive start-up costs. Some can be started simply with a great internet connection and a laptop while sitting and watching daytime TV. And if this is you, amazing.

However, for the majority of small businesses, there will be some considerable costs involved in getting up and running, especially for the first year. These costs can include rent, utilities, equipment, inventory, marketing, and legal fees. You need to be aware of all these costs, where the money is coming from and how you will be able to afford the entire operation. Not understanding how you will obtain funds, how to determine your spending and the importance of having cash reserves can be a fast track to failure before you ever have a chance to thrive.

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