You are faced with the task of making decisions every day. Your life can be described as a sum total of all the decisions you have made during the period which you have been alive. Every choice you make leads to a different outcome. In business as it is in life you are also required to make both financial and administrative decisions that will in turn impact the future of your company.
The first step to avoiding mistakes in the field of business and entrepreneurship is in identifying what they are, and avoiding them completely. Below is a list of common mistakes small business owners and startups make.
- Having unrealistic financial expectations.
This is also known as the get rich quickly attitude or fallacy. Being an overnight success usually takes twenty or more years. When you start a business, you have in your head the idea of success. Keep in mind that success takes time and effort. It is a process. When people entertain the falsehoods of the overnight success story, they end up making horrible, short term, financial decisions.
- Underestimating the competition.
In every field of business, there is a competitor. Usually successful business persons use competition as their motivation to be better and to do better. It is important to maintain a healthy attitude towards your competition. While it is great to have confidence in your product or service, it is very dangerous to completely disregard the competitions’ strengths over yours. Good competition will help to keep you grounded and provide a good basis for decision making.
- Getting into a cycle of debt.
Borrowing to finance a project or to raise capital for investment is sometimes necessary in order to survive in the business field. However, there is a limit to borrowing and getting into debt every time you see the need for a special project or investment. Financing your business through loans and debt and keeping at it, is one of the worst decisions you can make. In order to maintain a successful balance between borrowing and incurring extensive debts it is important to talk to a qualified financial expert. Having a well laid out plan to pay back one loan before asking for another is also a way to avoid this pitfall.
- Overlooking marketing and advertising.
When business picks up and is doing relatively well, most business owners stop investing in marketing and advertising. This is a very common mistake that is made in business. Constant marketing creates new consumers of your business. It introduces you to a large number of potential customers or investors every single day. It is one of the most important aspects of a business. Although you can survive on a loyal client base, you can never grow from it.
Frankly, every successful business has made poor decisions and mistakes when it comes to finances. You can never be perfect, luckily if you research well enough you can get informed on which paths to avoid beforehand and thereby increase your chances of success.
Bill Grant has worked in the banking sector in Atlanta for over ten years. In this period he has seen many small businesses want to know more about debt relief. He is currently a personal financial advisor to many of his businesses.