Every business starts out as a great idea. However, not all great ideas turn into successful businesses. What separates a prosperous business from a business that flops within its first five years after opening? Proper planning. One should not jump into business ownership, but rather take some time do your homework. A great piece of advice is to learn from the mistakes of others, so that you do not have to repeat history. The following are some of the most common pitfalls that new business owners have fallen into that are completely avoidable, if the right amount of planning and forethought is put forward from onset:
- Passion without a plan: One thing all new business owners share is a passion for their business. But unfortunately, enthusiasm alone is not enough to thrust your business over the failure hurdle. Before you quit your day job, take the time to draft a proper business plan. A business plan will help you flesh out your "great idea" and see if it can become a fruitful business.
- Go Big or Go Home: A very common mistake made by some entrepreneurs is start a new business as a full-sized business. These entrepreneurs seem to have a "go big or go home" type mentality. However, when it comes to starting a new business it is often best to start small. A smaller or scaled down version of a business will be less expensive to get up and running. Many new businesses fail because they simply are carrying too much debt. To avoid making this mistake, a new business owner should start as small as possible. This means try to forgo items that are not absolutely necessary. For now keep it simple. Start with the challenge of finding space to run your business. Depending on the type of business, you may be able to run it from your home or garage, and be able to forgo a pricey commercial lease. The same advice goes for hiring employees. Try to keep it to the bare minimum, even if it means for now you are the only employee.
- Selling yourself down the river: Another pitfall that seems to plague new business owners is failing to research ways to protect his or her own self, in the event the business fails or experiences problems. For example, say your business is being sued. Does your ownership structure protect you or does it leave you personally open to financial liability? If business problems arise, could you lose your home? If you are unsure as to what business structure best suits the needs of your business you want to speak with an experienced business attorney. He or she can explain the legal differences between the different business structures and help you to determine which one meets your needs.
- Failing to anticipate cash flow problems: A vendor unexpectedly goes out of business, leaving you to switch to a much higher priced vendor. One of your largest customers is a few months delinquent paying his or her bill, leaving you strapped for cash. These common business occurrences can quickly spell cash flow problems for a new business. It is important that any new business owner have a plan in place before such a situation arises.
As a business owner, you need to protect not only yourself but also your business. Before your business becomes embroiled in litigation, you need to find a trusted Kansas City Business Attorney. Attorney Charles Hyland is a seasoned business attorney, who understands the perils that new business face. To schedule a free and confidential consultation, contact the Hyland Law Firm, LLC, at (913) 498-1911 today. The Hyland Law Firm, LLC can work with you to implement tools to protect your business. Find out how by calling today
Tags: Kansas Business Attorney
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