Top 5 Mistakes to Avoid When Starting a Business
By Carl Agard

article in Sept/Oct 2008 Upscale Magazine

Even in a bad economy, now is a good time to start a business if you are a budding entrepreneur. Uncertainty in the workforce and cuts in salary is making it an easier decision to become your own boss. Nothing is more appealing than the financial independence that you gain by owning your own business.

Everyone has dreams of creating their own money making business. Your earning potential is limitless and you have the flexibility to spend more time on things you like; like traveling and being with your family. But starting your own business is not always easy. Lack of knowledge, preparation, and even mentorship causes many new businesses to fail. As a lifelong entrepreneur since the age of 16, I have witnessed many common mistakes that new business owners make; some I have made personally.

Before you leap into fulfilling your dreams, take note of some common business mistakes that owners make. Preparing yourself properly will save you time and money.

1. Not using the right entity for the business: This is a common mistake that I see all of the time. Most new business owners do not take the time, or spend the money to incorporate their business the right way. By incorporating your business as a Corporation, Limited Liability Corporation (LLC), or Partnership, you will be able to take advantages of many tax breaks, plus also shield yourself personally from any liability from the company. Your company will be registered with the state that you operate in, and your company will gain instant credibility. You can incorporate your business through your accountant, lawyer, or an online service like http://www.incorporatetime.com/ .

2. Insufficient funding to start business: Many successful entrepreneurs started their business by begging and borrowing. Without the right resources, you will not be able to get your business off of the ground. You have to establish a budget for rent, equipment, products, marketing, staff, and advertising. By not budgeting in the beginning, you may fall short of your goals. Besides your own initial startup capital, research other options to get funding like the Small Business Administration (SBA) and your local business banker. In your budget, plan for unforeseen expenses like an emergency or change in the market.

3. Not developing the right marketing plan: Even though you may have a great idea for a business, you still have to beat out your competitors to get to the consumer. Find out what your niche market is, and target your marketing plan towards them. Some businesses fail by targeting a broad marketing audience. You end up spending more money and wasting time on unnecessary leads. When I expanded my real estate company to Atlanta from New York, I targeted a niche market of New Yorkers relocating to Atlanta so I would not have to compete with an already saturated real estate market.

4. Hiring the wrong employees: This is a very common mistake that is easy to a make. Of course when you start your business, you want to include your family and friends; the people that you trust. But this is not always the best decision. They may not have the experience to perform the task that you need. They might not respect your position as their boss; imagine telling your Auntie that babysat you that she has to do a double shift at your restaurant!! Hire the best employees that will come in and share in the vision for the success of your company.

5. Not having a proper business plan: It is very important to develop a good business plan. By having your business plan, you are able to set your short term and long term goals to achieve. You can plan your budget so you can see your potential for profits and expenses that may occur. You will also establish the vision for the company and why you created the business in the first place. Many lenders require a business plan before they consider making a loan. There are many online courses that will teach you how to put together an effective business plan.

Real Estate Broker and Author Carl Agard has created over ten successful business ventures from the age of 16. From owning a hot dog stand as a teenager, to now operating real estate and publishing companies, Carl has a wealth of knowledge in entrepreneurship. He is the author of Getting the Real out of Starting a Business(Adelphi Publishing & Media Group) which teaches business owners on how to build wealth through entrepreneurship. For more information, check out his website http://www.carlagard.com/ .