1. Avoid co-mingling of finances
It’s all your money when you’re first starting out, but if you’re launching a business venture, you need to consider it as a separate entity. File a DBA or create an LLC. This will be your umbrella to do business under. Be sure separate personal and professional financials and bank accounts, get business management or consulting help regarding taxes and incorporation. If you’re unsure which route to take, professional advice is well worth the money. A business attorney will steer you in the right direction to make your venture a success.
2. Don’t throw money away on advertising
Consider the demographic that you’re targeting, and create advertising that will reach your target audience. Avoid throwing big money away on obsolete advertising methods. Leverage every opportunity to sell and advertise including social media and other Internet methods. Never underestimate the power of community and word-of-mouth to launch your small business.
3. Avoid over-ordering and overproducing
Dream big, yes, but keep stock on-hand in manageable quantities so you don’t get stale product or left with a ton of inventory should something go awry. Start with a small percentage on hand and gradually build your inventory as your sales channels grow and demand grows with them.
4. Personal vs business arrangements
We often partner with friends and family in getting a new business venture up and running. This can be a slippery slope. To safeguard your personal relationships, make sure that each team member’s role is well-defined, and that you never make assumptions about what the other person is thinking or doing. Some friends end up being lifelong business partners, while for others it doesn’t always work out so well. If you feel like things aren’t going well, it may be wise to buy out the friend or family member before you end up sacrificing your personal relationship.
5. Rent or lease an office or commercial space before you buy
80% of small businesses fail within the first 18 months. Even if you don’t think it can happen to you, it can. Don’t invest yours or other people’s monies in buying a commercial space until you’re solidly established. This also allows you to take your time in finding a perfectly suitable space when the time is right.
6. Price to sell
Don’t over price your products. Take the time to do the necessary R&D and strategic planning for the area you live in. You want people to afford what you’re selling and you want to appeal to your target demographic. You can’t give it away, but be sure you are cognizant of the economic environment that you are doing business in. You can price yourself right out of business if you’re not careful.
7. Pay your Dues
Don’t avoid buying the permits or certifications you need to operate a professional venture or regulatory agencies can shut you down. Pay to join your chamber of commerce,business associations, fraternal organizations or guilds that relate to your vocation. Members support and refer one another. Being a part of a community will only help to grow your fledgling company.
8. Learn the rules of doing business in your state
Rules and regulations vary depending upon where you live and where you do business.Make sure that you know the laws of your state as they pertain to your business. If you manufacture in one location and sell across state lines, for example, you may have to obtain more than one license.
Avoiding these very real pitfalls, can help your business to be happy, profitable and successful in the long term.