Opening up a business is a dream many dreams of. However, the reality is rather harsh and difficult. The job of maintaining a business is not at all easy. Studies show how a majority numbers of businesses fail every year because of lack of funds, lack of planning or mistakes done by the owners. There are, in fact, some very common mistakes that the owners make not knowing their consequences. As a result, they might lose their dream, their business altogether with time. In order to avoid such disasters, learn more about these very common mistakes done by small business owners-
- No Business Plan:
This is one of the foundational mistake that many small businesses commit. It is true that the presence of a proper business plan acts as a foundational base for the business. A business plan not only helps to track progress and check goals, but it also helps at the time of approaching for investors. Now, getting proper investors for your business is very important if you want your business to grow. This cannot happen without a solid business plan.
- No line between personal and business account:
As the amount of expense is quite small for small businesses, many tend to overlook the necessity of drawing a line between the personal and business account. This is a big mistake. No matter how small your business is, even if it is just a freelancing job, you should keep track of every penny spent for your business. Along with that, you personal expenses should not get mixed up with your business expenses. This is not important only for your own sake, but also for a simpler process of filing for tax. Otherwise, all the expenses are going to get mixed up and you are going to get lost at the end of a business year.
- Lack of planning for tax:
Many small business owners neglect working on their business accounts on a daily basis. This is not at all a good habit and it creates pressure at the end of the business year while filing for tax. In order to avoid getting trouble whiling filing for income tax, one should be more aware about working on the accounts on a daily basis. In order to save time and stress, a small business owner might consider hiring a professional for the purpose. Paying the tax on a quarterly basis can also be a solution.
- Lack of vision for a rainy day:
Many small business owners do not stay prepared for tough times. As a result, many fail to survive through those tough times. However, it is wise to keep a rainy day fund ready for times of crisis.
- The negligence about taking a debt:
It always feels good to stay debt free, true. In fact, clearing all the debts you had taken in the beginning of the business gives you satisfaction. However, that should never be the practice as it would harm the cash flow and the growth of the business.
So, try not committing these common mistakes if you want your small business to be a success.
