Starting a new business can feel a little like gambling. Fortunately, with the right strategies and good advice you can take a lot of the chance out of the process.
Many new entrepreneurs run into hurdles when they start their first company. No matter what, you are bound to learn a few hard lessons as you pursue your entrepreneurial dream. However, there are some lessons that you can learn from the people who came before you. Here are two common — and expensive — pitfalls new business owners should watch out for:
Underestimating cash needed: All businesses need some cash to get started. Costs vary, depending on company size and function, from a few thousand dollars to $1 million or more. It pays to figure out how much money you will need to start a company before you get too far into the process. This involves projecting how much revenue your new business will generate to offset startup costs. The calculation can be tricky, so it's always better to err on the side of caution and set aside a larger budget than you think you'll need.
Pushing a good "idea" instead of an "opportunity": There are a lot of good ideas, but most businesses don't succeed on that alone. "By focusing your startup on an idea — the product or service you offer — rather than an opportunity, you risk becoming boxed in," writes Sandy Richardson, a business strategist and author of Business Results Revolution. You need customers to want the product or service you are selling. You might have come up with a genius idea but if the market isn't interested your company will never get off the ground.