Running your very own business can be an exciting time for just about anyone. The prospect of being your own boss and potentially making more money than you ever dreamed of is enough for anyone to take the plunge. However, this dream is often shattered when business leaders continue to make mistake after mistake. Understandably, business isn’t something you simply learn but rather something that you need to experience to get good at. This, however, doesn’t mean you can’t avoid some of the obstacles along the way. The following list includes three common mistakes to avoid as a small business owner.
Borrowing Too Much Money
Yes, starting a business will usually require a lot of upfront costs, but this should not scare you into borrowing more money than you need. There are essentially two reasons why you should make sure that you know the exact amount needed to cover start-up costs and other variables such as purchasing repair supplies. One includes the rate of interest on your loan. When you borrow a lot of money, especially if you’re unproven, banks will usually slap a high-interest rate on it. The second involves the ability to decrease your chances of being rejected. As a small business, you are seen as a risk; thus, banks are less likely to lend you money if you come in asking for a large loan. Asking for a lower amount and demonstrating your knowledge of your company’s expenses will allow you to be approved for a loan.
Planning Only for The Good Times
Business leaders are often optimistic, which is why they even start a business in the first place. But the fact of the matter is that things will go wrong at some point in your business life. Therefore, it is paramount that you plan not only for the good times but also for the bad ones. What is your strategy to stop money bleeding? Will layoffs begin, or will you simply decrease the amount of inventory being purchased? These questions can truly save your business from going under.
Going at it Alone
Perhaps the most common trait among entrepreneurs is the mentality of “I can do this.” Sometimes it can be a helpful thing, especially when your back is against the wall, but many times it can actually hurt your business. Being a lone wolf isn’t going to help you, nor your company succeed. You must learn to delegate tasks to the rest of your staff.