Top 6 Things To Avoid When Starting A Small Business

You’re thinking of starting a new business. Your idea is written down, maybe even framed on a mantelpiece. You’ve got the cash, the business plan and your first employee. You’re ready. Or are you?

Before you set small business sail, take a look at this to-do list, built from the advice of entrepreneurs across the world. Ignoring these could cost you more than just money…

Don’t Mess With Finance

When starting a small business the first absolute rule of rules is to not mix your personal finance with your business finance. Keep the two separate in terms of both income and expenses so you can always see what’s coming in, what’s going out and what needs your attention. It also ensures that your taxes can be done with greater ease.

Speaking of Taxes

Don’t think that the tax reality is a distant dream. It isn’t, and — depending on what country or county you are in — the first year can be your most expensive as many tax organizations structure small business tax on a savings basis. Always put money aside for your taxes — in fact, try to take at least 50% of every payment and put it into your tax account.

Approach Partnerships with Caution

Starting a small business can be daunting, it’s true. Many of us would love to have someone walking by our side supporting us through the tough times and dancing around the table in the good times, but this can often end in disaster. Be very wary of entering into a partnership with your best friend, colleague or partner as it can end both the business and the relationship. That said, it can and does work, and there are many cases where people have formed fantastic businesses with their husbands, wives, brothers, sisters and best friends. However, they probably made sure that the relationships could handle it and put some paperwork in place. Just because you were besties since high school doesn’t mean they won’t take everything and run.

Get Help

Don’t go out and employ a stable full of people before you’ve started, but equally don’t make the mistake of doing everything yourself. You’ll end up exhausted and cranky, and delivering poor quality work. Consider outsourcing some of your to-do list, like accounts, to experts and look at hiring someone who can take off some of the load. This will seem like an unnecessary expense at first, but with you having more free time to explore new business, it will pay for itself in the long term.

Don’t Forget Yourself

Your strengths and limitations are what will define your business. You must be aware of the former and cater to the latter. Not everyone is suited to starting a small business and running a mini-empire of their own. This is not a failing, it is just down to who a person is and what they want to achieve. If you are honest with yourself and respect your limitations, then you can build a business around this and hire people who complement and support you.

Don’t Forget the Future

You probably already have a long-term plan in place and an idea as to where you would like to be in the next few years. This is a brilliant thing, but don’t forget that starting a small business is a lot like creating a new person: it will evolve and change over time. Allow the evolution of your product or service; don’t keep it stuck in stone. This doesn’t mean you should deviate and lose direction, of course, but rather that you pay attention to how markets and clients shift and allow yourself to grow and shift along with them.

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Originally published at blog.100tb.com.