Mistakes are part of the process of starting a new business — but some mistakes can end your dreams before they really get started.
Want to avoid some of the most common mistakes new business owners make? Follow these tips:
Get a separate business account
If you’re still using your personal account for the business as a holdover from the days when there wasn’t really any revenue coming in, stop it.
Having separate accounts makes the accounting process cleaner, protects you from personal liability for business problems and helps you avoid using company money for personal expenses.
Don’t max out your credit cards
Everyone’s heard stories of business owners who maxed out their credit cards to finance their dreams and eventually made a fortune. However, there are a lot more folks who just made themselves a pile of crippling debt that kept them from growing their business. Don’t do it. Learn to make do without anything you can’t afford right now.
Pay your quarterly taxes
When you’re employed by someone else, taxes just seem to magically come out of your paychecks and you probably get a nice return each year. That doesn’t happen when you’re self-employed. You bear all your tax responsibility and, unless you’re showing a loss for the year, you’ll probably owe a pile to the Internal Revenue Service. Make those quarterly tax payments a priority!
Build up your cash reserves
Ask yourself before every purchase, “Do I really need this or should I save the money?” If you’re honest with yourself, you can probably start a nice savings account — and you’ll need it. Emergencies happen in both our personal and professional lives. When you’re the owner of your own business, you have to be ready to bail yourself out with a quick infusion of cash from time to time.
Conduct reviews of your employees
When you’re running a small company, this might seem unnecessarily formal. However, reviews help you stay in touch, identify fraud and look for areas of improvement — all of which are important habits to develop.
Source: www.thebalancesmb.com, “7 Biggest Money Mistakes New Business Owners Make,” Ryan Robinson, April 18, 2018
