Enthusiasm can actually be both a blessing as well as a curse if you are new entrepreneur. The passion that you have can fuel your business, but you can also find that it will drive you into financial ruin if you are not taking the time that you need to think decisions through all of the way.
If you are going to be starting a new business, it is important to embrace fervor. However, you need to make sure that you are able to keep any impulsive behaviors to a minimum so that you are not falling victim to common pitfalls that most new entrepreneurs face.
These are eight common rookie mistakes that could cause a whole lot of damage with your startup:
1. Leaving your day job to start a business, simply because you are unable to get along with coworkers or bosses.
When you are a small business owner, you have to have interpersonal skills along with an ability to work with others. Owning a business has to be a collaboration that includes communication and patience.
2. Taking on too much, too soon.
You will quickly burn out on a mental level and go through your resources at a rapid rate if you overextend yourself. You have to learn how to pace yourself and always remember that this is a marathon and not a sprint.
3. The “build it and they will come” type of attitude.
Maybe you have a great service or product. While this is a great feeling, you cannot expect that your customers are going to line up to buy from you. It is important that you take to the streets to brand your business, start networking and market your offerings effectively.
4. Neglecting to prepare friends and family of the lifestyle changes that are going to come with small business ownership.
Once your business gets off of the ground, you are going to have to go without certain luxuries that you may have taken for granted in the past. You may also have to sacrifice a lot of personal times, so in order to avoid disappointment and hurt feelings, you need to talk with your loved ones in advance so they understand what to expect on this journey.
5. Forgetting to check if you can legally use your business name.
Did you know that infringing on the trademark of another company can get you into a lot of legal trouble? Never start using a business name without verifying that it is not already taken by someone else. You can do a free search online to look at business names that are already registered within the state that you are located. It can also help to look at a national trademark search so that you can find out if the name that you want is available in each of the 50 states.
6. Selecting the wrong business structure when you are registering your business.
A sole proprietorship is going to be a lot less formal and there is less administrative work, you can think about forming an LLC or even a corporation to help protect any of your personal assets from liability. The kind of structure that you choose for your business will impact various aspects of how you conduct business as well as your taxes. Do all of the research needed and even consult legal resources to make sure that you are going with the best fit for the company that you have in mind.
7. Not setting up a bank account for your business.
Mixing up your business finances and your personal finances can be rather confusing. In addition to that, it can cause a bit of suspicion if you find that your local tax groups are asking a number of questions. You will be better off if you are able to keep your business money and personal finances completely separate. You will also appear a lot more professional if you are writing checks from a business checking account over your personal checking account.
8. Feeling as though your goals, plans and objectives are optional.
These are not optional! You start a business and you need a direction that is going to lead you off the path to success quickly. You need to document everything that you need to accomplish and you can formulate a good strategy that will help you to get where you need to go. It is important that you are flexible so that you can adapt.
Self-control is necessary to avoid common mistakes, however it does not mean that you should forfeit any excitement about the future you have in front of you. Building up a business calls for passion as well as patience.