Starting a Business? Avoid These Common Traps

Whenever the global economy enters periods of uncertainty, people from all walks of life start thinking about opening their own businesses. It's a natural human response to a risky job market, rising inflation, and political unrest. If you are one of those entrepreneurial types who is seriously considering starting a company from scratch, it makes sense to review a few of the most dangerous pitfalls that first-time owners encounter. Simply knowing what they are is often protection enough against the common traps that appear along the road to success. In no specific order, here are several obstacles that thousands of people face when attempting to unleash their creative spirit on the marketplace of ideas, goods, and services.

Not Researching the Competition

Far too many prospective owners spend little time doing in-depth research on their competition. Again, this mistake can be chalked up to human nature because it's easy to spend hundreds of hours writing business plans, designing products, assembling mailing lists, and essentially focusing on getting the company's doors open. What often falls by the wayside is opposition research, the investigative phase of any competent startup operation. Take the time to identify every viable, potential rival in your niche. Study their websites, prices, special offers, shopping carts, advertisements, ‘About Us’ website sections, and more.

Ignoring Potential Sources of Financing

Unfortunately, too many stop before they start, assuming they don't have enough financial resources to sustain the months it can take to get a company off the ground. Most working people have more available capital than they at first suspect. Among the many hidden sources of financing for a young business, one of the most overlooked ones is life insurance.

It's worth remembering that you can sell almost any type of life policy you currently own. Check the fine print to discover how you can sell the contract to a third party for cold, hard cash. The best way to begin is to review a complete online guide to the subject that explains everything you need to know. Plus, once you sell your policy, you can use the money for any purpose under the sun, and that includes financing your brand-new business.

Assuming You Need to Rent Office Space

In your mind's eye, you've probably envisioned yourself sitting behind a desk in a rented office, working away at the keyboard and telephone. In reality, most new organizations don't need dedicated, rented office space for the first few months of their existence. As an alternative, use an extra room, corner of the garage, or an attic loft as a temporary headquarters until you acquire enough regular customers to support the expense of a more formal office. And there are plenty of ways to track employee performance when working from home as you expand your team or outsource work.

Doing Your Own Books and Taxes

Unless you have a degree in business administration and know enough about accounting, finance, and tax law to do your own books and file tax returns, hand the job over to someone else. Fees are very competitive, and you'll have the peace of mind that comes with having all the financial statements and tax issues in perfect order.