The challenge of starting a new venture doesn't go away when you open for business. Here are some common pitfalls, and what you can do to avoid them.
Running out of cash
In the euphoria of starting a business, it's easy to overlook the gap between making the first sale and banking the money. Often the wait is too long and many new companies run out of cash. A cash-flow budget helps you predict highs and lows in time to take corrective action fast.
- Not knowing your customers Changes in your customers' preferences and your competitors' products can leave you in the dust-unless you get to know who your audience really is, what they want now, and will likely want next.
- Doing it all on your own You might be the key to everything but you cannot do everything and grow at the same time. Even modest initial success can overwhelm you unless you hire staff and delegate responsibility.
- Ignoring employees Motivating and managing your employees is one of your greatest challenges. More employees mean more "people problems." Left unresolved, they can destroy morale, productivity and profits.
- No business plan If you rely purely on instinct to guide your business instead of a written plan, you're headed for trouble. A plan helps you focused on where your company is going and why and how you're doing along the way.
- Ignoring the numbers As an owner/manager, your primary goal is to make a profit. You need to know where you stand on a regular basis, with a timely system of recording and analyzing key data.
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