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If You’re Starting a New Business, Don’t Make One of These 5 Common Mistakes



January 01, 2022
Saturday PM

(SitNews) When starting a new business, you are bound to make at least several mistakes. No one has ever perfectly launched and run a business; therefore, it is important to give yourself some grace when embarking on your entrepreneurial journey. You can also prepare yourself in advance for some of the more common mistakes that new business owners tend to make.

Not understanding how to properly run a business

While it is true that you don’t need formal business training to start a business, a significant number of people jump into entrepreneurship with zero understanding of how to run an organization. This includes knowing what permits and licenses are required, how to create a business plan, and how to keep track of profits and losses. Having at least a basic idea of how to do these things (and others) is essential in successfully starting your new company.

One exceptional way to succeed from day one is to go back to school for business education. You can take classes or earn either an undergraduate degree or an MBA. Online MBA programs are particularly convenient for working individuals. A solid program can develop your skills in accounting, marketing, economics, and strategic planning. In addition to the practical knowledge an online MBA program can instill, it can also boost your overall confidence as an entrepreneur.

Skipping important steps to make your business legal

Even though others may be getting away with improper business conduct, you should never risk your assets and reputation. Do not skip critical steps to make your business legal, including acquiring a state sales tax permit, paying sales tax when required, applying for all required business licenses, reporting your income on your personal taxes, and getting all necessary health inspections (if applicable). Ignoring steps like these can lead to fines or, in the worst-case scenario, jail time.

Overlooking the importance of your chosen business structure
Not sure what a business structure is? Planning to run your business as a sole proprietor? If you said “yes” to either, it is important to take some time to research your options. For those who said “yes” to the first question, a business structure “influences everything from day-to-day operations, to taxes and how much of your personal assets are at risk.” You can select a sole proprietorship, partnership, limited liability company (LLC), C corp, S corp, and others.

Thoroughly researching each of your options empowers you with the knowledge to make the best decision. Although sole proprietorships can seem appealing, this structure can actually put your personal assets at risk. Many times, if you are the only owner of a business, an LLC is the safest way to go. However, since your individual needs are unique to you, be sure to learn about every choice available before making your selection.

Not pricing your products/services properly

Another incredibly common mistake is to price your services or products too low or too high. Oftentimes, new entrepreneurs will err on the side of keeping their prices low to attract as many customers as possible. Before settling on an official price list, research competitors who offer similar products and services to see what they are asking. Also, don’t forget to factor in the cost of materials, time, and anything else that adds to your cost.

Trying to do everything yourself

Almost every new business owner tries to take on more than they can reasonably handle. Rather than outsourcing critical tasks — such as customer service, graphic design, and bookkeeping — they try to do everything themselves. Save yourself time, frustration, and effort by outsourcing to freelancers and employees from the very beginning.

Following the above strategies is a great way to avoid making preventable errors when launching a new business. When you inevitably make your first mistake, don’t beat yourself up. Instead, resolve to learn as much as you can from the experience, and to move forward.

Source: Sam Marcum created which aims to help organizations thoroughly-articulate their benefits with brief, engaging multimedia material and genuine thorough reviews of health insurance companies.

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