While business owners are typically quite confident and expect to be successful, the odds are not always in their favor. Fortunately, there are things that you can do (and not do) to improve those odds of company success. You don’t want to spend months, years, or decades on your business reputation only to damage it in minutes by committing an egregeious error.
Here are 5 top things that need to be on your “don’t do this” list for your business to survive and thrive.
1. Don’t Muddle Personal And Business Expenses Together
New small business owners often neglect to separate business expenses from their personal ones. They end up muddling everything, which becomes a real problem come tax time.
By separating expenses, it is possible to keep better track of what’s coming into and going out of the business account. Keeping a close eye on the cash flow is sensible when money is tight, but it also avoids mysterious withdrawals going unnoticed for too long. Also, any future audit is more easily completed.
2. Don’t Waste Time On Busy Tasks
It is possible to spend an entire day on busy tasks that aren’t important or urgent but were easy to complete. These are attractive but won’t move the needle for the business. You have only got so much time to make significant progress and achieve profitability, so there is none of it to waste.
Block out your time. Use a calendar app to set the times that you will work on the most important tasks. Avoid overly relying on a To-Do list because it is all too easy to fall into the trap of grabbing the easy to-dos. Plan your day the night before (or before you leave work for the day) to get a jumpstart and know that what’s in your calendar is critical.
3. Don’t Enter A Market Before Doing Your Due Diligence
Diving into a market without researching the viability of it is a big no-no. Unless you have endless capital to invest, it often leads to disappointment and an unsustainable business venture.
Avoid being first to market unless you have deep enough pockets to wait it out. Look for markets that are already proven where there are ways to innovate to beat the current competition.
4. Don’t Alienate All Your Friends By Asking For Investment Capital
A great way to end up with fewer friends is to pester them to invest in the business or to provide a loan. Asking for money from friends and family is common but should be avoided unless you want frosty dinner table conversation next holiday season and the one after that.
While you likely may discuss some aspects of your business with friends, keep the money side separate from the friendship. Investment capital discussions and friendship rarely mix well together.
5. Don’t Overspend
Overspending to make an office look great with all new furniture, fixtures, and more is a great way to run out of funds.
If anything, customers will be happy to see a focus on getting the business operating right and providing a valuable service to customers, rather than on looking pretty. Given that sales revenue may not materialize as quickly as you have hoped, it is better to be frugal with business expenses wherever possible.
New Business Needs
When avoiding a few of the obvious pitfalls that many founders fall into, it increases the likelihood of future success in your venture. It is not a guarantee, but it is half the battle in business for new owners trying to survive the new economy. Minimize these mistakes and eliminate these errors to maximize your business success!