Even if a business plan looks great on paper it needs real-world testing. Here are six of the most common mistakes entrepreneurs make when starting out:
1. Starting too big.
Begin with small, incremental steps. Set realistic goals and gradually work towards meeting these objectives.
2. Giving up their day job too soon.
Most of the successful business owners don’t give up their regular jobs immediately. Wait until you’re reasonably sure you can generate enough income from your new venture.
3. Committing to a big lease right away.
Leasing business space is usually a significant financial commitment that lasts for years. If possible, find a way to begin operating on a smaller scale before signing on the dotted line for expensive commercial space.
4. Failing to have a financial management system in place.
Don’t make your accounting an afterthought. Early in your business development establish an in-house financial tracking system (for example, QuickBooks) or use an outside bookkeeper.
5. Failing to consider collateral.
Most business loans require collateral such as real estate, a vehicle or equipment. Be sure to discuss what you will need early in the process with your lender.
6. Taking on too much debt.
Starting a business requires investments, but those investments can quickly turn into overwhelming debt. Pay all of your bills on time, including personal expenses unrelated to the business, and keep your debts at a manageable level.
In short, dream big but start small enough to protect your financial future!