Becoming an entrepreneur is a dream come true for many people. However, according to a report cited by LendingTree, roughly half of all businesses will be closed within five years of opening. While this is sometimes out of the control of the business owner, there are many ways that entrepreneurs can improve their chances of success. Avoiding the following six mistakes is a great start.
In today’s post the 6 common mistakes new business owners make, and that we are going to talk about are:
- Not Seeking Startup Support
- Choosing the Wrong Entity Type
- Going Into Business With Friends
- Working in an Environment Not Conducive to Success
- Failing To Seek Legal Help When Needed
- Using the Wrong Payroll System
1. Not Seeking Startup Support
Whether you’re brand new to the game or your company has been up and running for several months, seeking the help of a business mentor can make or break your business. Danielle, founder of The Wanderlover, offers private coaching for both newbie and experienced entrepreneurs who are looking to elevate their company’s success. Whether you need a roadmap for launching your venture or expert advice on scaling your business, apply for your customized coaching plan with Danielle to watch your dream soar to new heights!
2. Choosing the Wrong Entity Type
When you form your business, you will have a choice of what entity type you want to create. Each option has its own pros and cons. However, choosing the wrong one could cost you extra money in taxes or open you up to serious legal liability. For most entrepreneurs, a limited liability company is the best choice. However, if you are unsure, consider consulting a lawyer to better understand your option.
3. Going Into Business With Friends
A lot of new business ideas are spawned when two friends sit down together to brainstorm or flesh out an initial concept. It can seem fun and exciting to potentially go into business together. However, working with friends can be difficult. It complicates the business relationship due to the added personal element. While it is OK to work with friends in some cases, consider all the pros and cons carefully before doing so. No matter who you work with, make sure to have an operating agreement or equivalent governing document.
4. Working in an Environment Not Conducive to Success
Entrepreneurs can face all sorts of roadblocks that can get in the way of their productivity and success. In many cases, having the wrong environment can be a serious issue. For example, if you are trying to start a business while using a desk squeezed into the corner of your kitchen, distractions around the home may become an issue. Developing the right workspace can help you thrive.
5. Failing To Seek Legal Help When Needed
Every entrepreneur needs a little legal help from time to time, but a lot of business owners are hesitant to hire lawyers due to the cost. Unfortunately, failing to hire a legal professional when you need one could end up costing you a lot more. Understanding how a lawyer can help makes it easier to make intelligent decisions about when you need to hire assistance and when you can go it alone. You can use a website like Avvo to find a sharp legal mind in your area.
6. Using the Wrong Payroll System
Choosing a good payroll system for your business is essential once you start hiring people. While hiring a team is a great sign of success, it can also be a complicated process. An efficient, organized payroll system can simplify this. For many businesses, the right system should be one that combines automated payroll processes with enterprise resource planning, or ERP. Along with payroll, ERP software manages other important business to-dos, including sales forecasting, strategic planning, and product and service delivery scheduling. QuickBooks is a good solution for businesses of all sizes looking for ERP functionality without the traditional complexity of some of the more convoluted systems on the market.
Learn More About Finding Success as an Entrepreneur
Becoming an entrepreneur can be the key to achieving your dreams, but growing your business will take plenty of hard work and commitment. By avoiding the above five mistakes, you can put your business on the right path to success.
This article was written by Sam Marcum of bizbenefitguide.com