It’s relatively common for aspiring entrepreneurs to make mistakes as they start their new business. There are many intricacies in starting a business. The previous blog post talked about the first three of the five common mistakes aspiring entrepreneurs make. Let’s recap.
The first three mistakes are:
Knowing and understanding what mistakes to look out for can help aspiring business owners avoid these common pitfalls. We’ll talk about the last two of these common mistakes today.
MISTAKE #4: Underestimating Their Risk
Many people think that if they have insurance, their risk is covered. Not so fast, my friend. Insurance is wonderful and necessary, but it simply isn’t the solution for every possible exposure area.
It’s a common myth that only big corporations get sued. But it’s a myth for a reason. The vast majority of all business litigation involves small businesses.
This is why you must understand the risk involved in your business and have the proper structure in place to cover yourself. If you don’t manage your risk, it will manage you.
MISTAKE #5: Failure to Manage the Business
There’s more to running a business than just being good at your craft or offering a fantastic product or service. If you are unable to keep up with the everyday tasks of running a small business, you will struggle.
Many entrepreneurs lack much needed small business education and experience.
There are many aspects of running a small business, and it’s almost like putting a giant puzzle together. You need to consider the financial and operations aspects of your business.
Don’t overlook the financial aspects such as budgeting and forecasting, revenue generation, cash flow management, invoicing, payables, receivables, accounting and bookkeeping, taxes, etc. Plus, there are operations, including sales, product/service delivery, customer service, scheduling/logistics, inventory control, employee management, etc.
AND you also need to set aside time to work ON the business versus IN the business. This includes marketing, business development, new product/service development, and strategic planning, etc.
You must find the right balance to be successful.
Starting and running a business takes a lot of work. If it were as simple as just having a good idea, the number of failed companies would be lower. The reality is that without proper discipline, focus, execution, and support, many small businesses will fail.
I want to make sure your business is a successful one. I’ve worked with many entrepreneurs to help them in these areas, and I’d be happy to help you as well. If you’d like to have a conversation or enlist my help, please schedule some time with me or shoot me an email at kent@kentgustafson.com.
Schedule a one-on-one call with Kent to create a financial plan with lasting impact.
