This list came to me last night while I should have been sleeping. It’s my top 5 list of common mistakes that new entrepreneurs make just after starting their new ventures. I am sure that there are quite a few additional items that we could add, but this particular list is built based on my personal experiences.
1) They don’t install accounting software right away.
This has to be one of the worst mistakes you can make (believe me, I am talking from experience). You will quickly get way behind in keeping your books and catching up is a horrible task. There are some great accounting packages out there (my favourite is Simply Accounting). Go to your local office supply store and pick one up today – Don’t delay it any longer.
Microsoft Professional Accounting
Simply Accounting
MYOB
Quick Books
2) Even if they install some accounting software, they don’t use it.
There’s no use in spending your money on an accounting package if you don’t use it! Once you install the software, do your books on a daily basis, this way you won’t fall behind and it won’t be that huge of a task. If you really dread the thought of having to handle the books for your business you could look into hiring a bookkeeper to help you keep everything in order.
3) They fail to manage their accounts receivable properly (AR).
Your business is going to succeed or fail based on it’s cash-flow. When you’re just getting started this is even more important to the overall likelihood of being successful. Watch your accounts receivable like a hawk, and keep that cash flowing, your business will be more successful, and I guarantee you’ll sleep better at night.
4) They have no real idea of who their customers truly are.
In the rush to start their own businesses quite a few entrepreneurs fail to truly understand their target markets. If there’s one area where I think you should spend some extra time planning and doing your research, it’s here. So many people start businesses based on a product and/or service they think is just great, but outside of themselves there is no market. Put your ego away and find out if your idea will really float by doing your research before you start.
5) They simply trade working for someone else for working for themselves.
If you want a great example of this pick up a copy of the E-Myth by Michael Gerber and see just what happens when you just start working for your business instead of on it. Systemize and document everything that you can, and then find people to work for your business, while you concentrate on working on your business. You’ll be much happier in the end!
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