Entrepreneurs face a harsh business world, where new ideas set sail in the wrong conditions and sink prematurely everyday because of poor planning, bad management, and a variety of other dangers. The best way you can avoid these icebergs is to scout them out in advance and ready your course appropriately. Let’s take a look at a few of the most common pitfalls entrepreneurs face when starting a new business or commercial enterprise:
Accidents and ensuing injuries cost businesses billions of dollars a year in medical expenses and attorney fees. It’s up to the business owner to create a safe premises for their customers. Make sure your business has protections in place to prevent slips and falls, one lawsuit that can sink a fledgling business. Business owners should invest in general liability insurance in order to reduce the financial impact of such disasters.
Not Raising Enough Capital Or Distributing Equity
Entrepreneurs often believe they can get their businesses running cheaply and can therefore hold on to large shares of equity without properly distributing it into operations. This creates a volatile business model that does not have a sound infrastructure. Raise the money you need and invest it where needed. Don’t hold out in order to get a larger share later on. And vary your financing to free yourself up, raise start-up capital from multiple sources: bank loans, personal loans, investors, business credit cards, crowd-funding, etc.
Hiring Friends, Not Professionals
This is all too common. Entrepreneurs and small business owners launch their new company tailed by their best friends, thinking that the electric, dynamic ideas that spout out during champagne conversations will be enough to make the business flourish. In reality, ideas aren’t enough. You need trained professionals who you can trust to translate your ideas into actionable items and assets. Only hire people you can trust to strengthen the functional design of your business.
Not Knowing Your Financial Partners
On the other hand, you want your partners to be trustworthy, if not friends. Many entrepreneurial enterprises fail because of disagreements between partners over direction, implementation, and allocation of funds. If you haven’t worked directly with someone before-or don’t even know someone who has-that person may not be a trustworthy partner. Vet your business partners based on more than how much money they can bring to the table.
Not Collecting Accounts Receivable
Some small businesses aren’t aggressive enough collecting money that’s owed to them for fear of seeming desperate or cash-strapped. But what’s worse: being viewed as hasty or going bankrupt? And collecting money shouldn’t even really be viewed as hastiness; this is diligence and professionalism. Any vendor or client who owes you money should be practicing the same ethos of professionalism by settling their accounts with you in a timely manner.
These pitfalls can besiege any entrepreneur, no matter how sure-footed he/she is and no matter how great the original idea was. Proper implementation, competent employees, trustworthy partners, and diligent professionalism both in financial matters and workplace safety are necessary. Without these procedures and safeguards, your business could be at risk of failing.