7 Mistakes Any New Business Should Avoid
Starting a business requires a lot of work before you even open your literal or figurative door. It's easy to get caught up in the excitement and not focus on the details that may bite you in the posterior down the road. If you avoid making the following mistakes, you will have a chance of succeeding. If not, you're guaranteed a rocky road.
1. Not having a business plan: You can't have a business without a plan. Period. You may think that you have it all planned out in your head, but you need an in-depth plan that covers market research, financial planning, competitive analysis and so on. Don't put it off. No one will take you seriously without one.
2. Not knowing your credit rating: Regardless of whether you are personally financing part of your business, relying on loans or securing venture funding, you need to know your credit rating. You may find that those trips to Cabo in college on that first Visa credit card are still dragging your credit rating down. Check out your Experian, Equifax and TransUnion scores to find out where you stand.
3. Not being realistic about the debt you're assuming: Understand the structure of the loan you've taken out. Pay strict attention to your finances and continually update your business plan to ensure you're remaining realistic. You can't plan for sudden economic downturns or recessions, so don't bite off more than you can chew. Don't overspend just because you have the money in the bank.
4. Not doing your homework when naming your business: Make sure you check with the Secretary of State's office in your state to ensure that the intended name for your company is not already being used. In addition, you can search the United State Patent and Trademark Office's computer system (http://tess2.uspto.gov) to see if anyone has already trademarked your anticipated name.
5. Not putting thought into your company structure: Make sure your company structure reflects the activities of your business. A sole proprietorship is sufficient if you own the business and are prepared to take full legal responsibility should an issue arise. If you are in business with partners, structuring runs the gamut from general partnerships - where everyone is equally personally responsible - to corporations, where you have no personal responsibility. Research this matter carefully, and if you are in business with partners, make sure you get buy-in from the other partners.
6. Not establishing an Internet presence: To be taken seriously, most companies will need at least their own domain, hosting service and email. A site such as WebHostingUnleashed.com can help you decide whether a hosted or colocated service is right for your company. Regardless of the kind of business that you're starting, you need at least a credible email address reflecting your company's name. An @aol.com or @hotmail account just won't fly.
7. Not researching vendors of essential services: Regardless of whether you're talking phone systems, payroll services or financing, you need to know who provides the features and options you need. Do your homework. Compare prices, understand what options make the most sense for your company and make sure to take growth into consideration when choosing services.
