(Guest Post by Brian Patterson. Want to share one too? Let us know.)
As an entrepreneur in a family filled with self-starters, I’ve learned a lot from their mistakes. Though I’ve still made quite a few of my own, I’ve been able to avoid some of the bigger ones because family members have forged an error-filled path ahead of me. Read on for a list of five common mistakes entrepreneurs make, and tips for how you can avoid these missteps.
Failure to plan
Oftentimes, new business owners dive passionately into a project because “the time feels right” or “it’s now or never”. In today’s competitive environment, it can be hard to sit back and carefully craft a business plan from the ground up. However, numerous factors must be taken into account. Create a timeline and prioritize each segment. Take the time to price shop and compare rates between moneylenders, vendors, and service providers. Plan ahead, spend time doing market research, and you’ll be more likely to get reasonable rates and minimize future losses.
Don’t assume your business will be a success. So much can go wrong when it comes to starting a company that despite careful planning and months, maybe years of preparation, it doesn’t always pan out. It’s always dangerous for entrepreneurs to let their cockiness get the best of them. When this happens, there is a tendency to burn bridges and ignore back-up plans. Never a good idea.
Lack of cash
This might seem like a no brainer, but running out of capital is surprisingly easy. Even with careful planning and humble beginnings, costs tend to become greater than expected and the little things really do add up. When cash flow is hampered, business owners have a serious problem on their hands. Make sure there is contingency money available for when the cash runs out. Lack of capital does not mean your business can’t survive; it might just need a little extra support before you can start turning a profit.
It’s a rare sight to behold when one person can truly do it all. Generally, we have our strengths and weaknesses and when it comes to launching a business, having a partner or co-founder is a good idea. A partner can help reign in any outlandish ideas, keep the business on point, and provides a sounding board to bounce ideas off of. Working with a partner generally increases the business’s network and creates a larger support system.
This is a big one. No one is a mind reader. Not your partner, not your employees, not your vendors. In order to build the company you envision, you need to articulate your thoughts as clearly and succinctly as possible. Good communication is truly the cornerstone of a successful business.
There is no magic spell that guarantees a successful business, but with these five tips in mind, hopefully you won’t fall prey to these common mistakes. From one entrepreneur to another: best of luck!
Brian Patterson works with companies ranging from small day trading organizations to large government contractors. He helps minimize the risk of failure through proper preparation and planning.
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