5 Common Mistakes Startups Make and Tips on How to Avoid Them
Turning an idea into a profitable business can feel overwhelming. When first starting, it can seem like you need to complete nearly a million tasks before your small business can get going.
The advice we share here covers the basics of starting a business. With these tips, you’ll be able to protect yourself from mistakes and make sound decisions right from the onset of forming your business.
Tax issues, liability concerns, and slow sales are just a few of the problems an owner can look forward to if they don’t prepare their business properly. Here are five business management tips to help you avoid these issues and other problems related to starting your business.
Protect Yourself with a Business Entity
Enlisting your company under the right business entity can protect yourself from business-related liability concerns.
A business entity is a legal classification for your business and its assets. This applies to any business, even those running totally online. Liability even applies to those individuals that run a one-person company.
One of the most common business entities is an LLC. It’s easy to set up and fairly affordable. With an LLC at the end of your name or business, you protect yourself from liability concerns and have stronger legal protection.
Insurance, bank accounts and investments are much easier to manage with a legal entity. Instead of tying an owner with their personal assets, the paperwork is founded on the business’s assets instead.
Enlisting your business as a legal entity also improves your brand as a company leaves a professional impression on vendors, clients and customers.
Separate Business and Personal Finances
This small business tip goes hand-in-hand with selecting a business entity.
Think about how difficult it is to track all your personal purchases in a given month. Imagine tracking your finances for an entire year–that task can get difficult without automated help.
Businesses that fail to keep track of their business-related income and expenses can face a handful of money-related problems.
Without a good accounting system, a business can lose track of its cash flow and become burdened by a slew of tax issues.
First, you’ll want to separate your business expenses from your personal expenses. With a business entity, you already have a solid footing on tracking business-related finances–you can get started tracking your business expenses by opening a new bank account just for business. You’ll also want to use accounting software or enlist the services of a CPA or accountant.
Having a separate business account and a strong accounting system can protect you from tax issues and keep track of the income and outgoing cost of running your business.
Balance Your Budget with Accounting Software
Whether you choose to hire a dedicated accountant or take on your accounting on your own, you’ll need to start with the right accounting software. The easiest way to keep track of your ledger is with online software.
Good accounting software offers a handful of features, such as the ability to calculate incoming cash flow and record business-related expenses.
These applications help business owners build a budget, track spending, and organize tax-related information. Many options for accounting software often have additional features, like the ability to send invoices and collect payments from customers.
A startup business needs organized finances. The stakes are high and margins are tight, which makes financial data crucial to running your business.
Invest in Marketing
Whether deciding to use social media, build a website, or hand out business cards, your business needs to market itself, and capture an audience.
Building a web presence can quickly establish a brand you can then promote to a digital audience or in person.
Social media is an excellent form of targeted marketing that focuses your marketing efforts towards a target market. Engagements with sponsored advertisements on social media direct information about products and services to a precise audience, streamlining the sales funnel.
With targeted marketing, you can set filters on ads depending on your audience’s age group, location, and time most active during a given day or week. Best of all, these advertisements are affordable and can lead to real growth in sales.
Without social media marketing, your business may not find the audience it needs to grow online.
Establish a Business Relationship with Employees
What’s important here is to have a time that employees can reach you and how they can contact you. Giving them your private cell number can affect your life in more ways than one.
Whether you run your business from an office or from home, you’ll want to
schedule a time that you’ll be available for employees to reach you. While it may seem counterintuitive to restrict availability, business owners need to focus on running their business while also having time to enjoy time with family and friends.
With a set time to answer emails or field phone calls, owners leave themselves free to do what they do best.
Get Things Right the First Time
Many businesses don’t take the time to set up right and end up making mistakes down the road.
With finances in order, marketing set up, and your employees managed, business owners, gain proper footing from the get-go. Following these small business tips can set a business up for success.
