According to Bloomberg, 80% of entrepreneurs who start businesses fail within the first 18 months. How can you ensure that you’re not part of that statistic? There are 4 Money Pitfalls that you to be aware of so you can steer clear of them.
- Failing to Pay Attention to the Numbers. Most business owners are busy doing what they do best: building a custom deck, crafting an awesome microbrew, writing killer website copy. However, if you don’t stop long enough to evaluate your business finances, you may find that funds have dried up and it’s too late to do anything about it. Review the key numbers weekly or at least monthly. Not a numbers person? Hire a CPA or bookkeeper to keep you on track.
- Excessive Personal Debt. Being on shaky ground with your personal finances as a small business owner is a recipe for disaster. Excessive personal debt will cause you to make decisions that provide you short-term cash flow, but could be your undoing in the long run. I always advise those who are thinking about starting their own business to get their personal financial house in order first!
- Not Valuing Your Time. Figure out what you do best and delegate the rest. I recently heard a business guru say, “If you want to be a millionaire, stop cleaning your own toilets and cutting your own grass.” If I can pay someone $25 per hour to clean my house so I can charge $100 per hour for a Financial Coaching session, you better believe that’s a smart move. What are your “time vampires” – those tasks that suck away at your time but aren’t giving you tangible business results? It’s time to off load them on to someone else.
- Thinking You Can Do It All Yourself. In the age of TurboTax and LegalZoom, business owners can fall into the trap of thinking “do-it-yourself” to save money is the way to go. However, in important matters involving your business, these shortcuts may end up costing you both time and money. A good attorney, tax accountant, and business coach will pay for themselves many times over. Ask other business owners for a trusted referral.