All Articles Tagged "business mistakes"
They always say that the toughest part of starting a new business is surviving the first five years. But what if you had a blueprint on how to avoid mistakes that business owners typically make? Well, Yahoo Small Business Advisor reports on the “10 Mistakes New Business Owners Make (That You Can Avoid).”
Among the biggest mistakes is not using a contract. When someone hires you or your company for work, you can’t trust that you’ll be paid just because of someone’s word or a handshake. A contract will also spell out in detail what is expected of you, so that if there are later complaints you can go back and explain that you have fulfilled the terms. It can be hard when a client insists a contract is unnecessary, particularly when you’re just starting out or working with someone you have a pre-existing relationship with. But in the long run, it is the only way to do business fairly — for you and your client.
Another big one is not understanding payment terms. For a small business, when one client doesn’t pay it can have a snowball effect for paying your own bills. It is important to have a buffer fund to handle your urgent bills each month even when clients don’t come through.
“Owning your own company has its drawbacks and at first, payment schedules are one of them. Be prepared to wait for payment, even if you’re an independent contractor in business by yourself. Know your contract — and know what the terms mean and how soon you can collect. The bottom line is that you can’t pay this month’s light bill with money you won’t see until 30 or 60 days after the job is completed,” notes the article.
Yahoo Small Business Advisor also gives a great list of important small business tools. Some of the standouts include:
- Freshbooks – an affordable online billing service
- Tax Receipts – a resource to maximize your tax deductions with an organized system, and learn what deductions you can take in plain English
- Outright – a simplified, secure online bookkeeping service
- Our Deal - contracts that are easy to understand and can be signed online
(Entrepreneur) — 1. Overinvesting in the business. To look more professional, young entrepreneurs may spend their savings too freely. Maybe they lease ritzy offices or purchase high-dollar equipment. Overspending on business expenses that aren’t absolutely necessary can quickly erode your personal finances, says Alexa von Tobel, founder and CEO of LearnVest.com, an online personal-finance resource for women. It can be easy to burn through your savings before you even have a product or service to sell, she says. That’s when young entrepreneurs dig themselves deeper in the hole personally. Instead, “spend every dollar you have on building a really good product and get it in front of users,” von Tobel says. “If your product isn’t good, there’s no hope for making any progress.”
(Black Enterprise) — Being afraid to take the leap: “The biggest mistake I think people in business make is they don’t take the leap and this is the main thing I wanted to know from the 45 entrepreneurs I interviewed,” Jordan says. Even Soin, who started MTC with $1,700 and sold it for $425 million, was hesitant at first. Before starting the company, he tried dipping a toe in the water, operating the business as a side venture and it was an utter failure. It was only at the point when he decided to jump in with both feet that it worked.