5 New Business Money Mistakes
(Entrepreneur) — Figuring out the financial details of a new venture can seem a mix of aspiration (How much I’d like to make. . .) and folly (I need borrow how much?). But writing down numbers on paper and as accurately as possible is important. It can provide a map to show where you are trying to go and what it will take to get there. It can also reassure investors, employees and yourself that you thought things through, did your research and have a realistic view of what your business needs. But it’s easy to go wrong when mapping out a financial plan, especially on first-time ventures. Here are five finance-related mistakes entrepreneurs often make and how to avoid them.
1. Underestimating operating costs: About a third of new business owners said they underestimated their monthly expenses, according to a recent survey by insurer Hiscox USA. While founders remember the obvious expenses, they often forget related items that can quickly add up. For example, if you make a product, you also have to package it. If you need a car or truck for business, you also need auto insurance.