Four Mistakes New Entrepreneurs Make
Every entrepreneur has stories of mistakes that they have made. When you’re a first-time entrepreneur, there’s so much to learn. You’re not only learning the business, but you’re also dealing with paperwork, legalese, and accounting headaches. Worse, if you make the wrong moves, you could invite the IRS to come and audit you. That’s never fun!
Being an entrepreneur involves so much more work than being an employee, but it is also so much more rewarding! There is a lot to learn, so many opportunities to grow, and there’s nothing quite like seeing positive reviews for your business. Indeed, it becomes a source of pride!
Most novice entrepreneurs make a similar set of mistakes. Here are the top four ones, and what you can do to avoid them!
#1 Not Paying, Filing, Or Being Aware Of Taxes
In the United States, taxes are complicated. In most jurisdictions, you have a sales tax, and in most states, you have income taxes. You also have a federal income tax. Some states require you to collect sales tax on orders online, even if you don’t have a physical presence there now. States like Washington don’t have an income tax but have a business and occupancy tax (B&O) that every business within the state must pay on revenues.
If you pay yourself – either through an LLC or if you have structured your business as a sole proprietor – then you have to pay self-employment taxes and income taxes, usually in quarterly installments.
You could spend your whole day reading laws, rules, and regulations surrounding taxes and still be confused. Unfortunately, the code isn’t particularly forgiving about mistakes, either.
Despite these complexities, many entrepreneurs forge ahead and try and figure out taxes themselves. If you have a simple business, setting everything up is likely something you can do yourself. Make sure you set up your sales tax account and state income tax account. Ensure you make any necessary filings with the federal and state governments.
If your business is more complex and involves multiple states or countries, please consider hiring a proper accountant or tax lawyer who can help you set up your accounts properly so that you can accurately track and pay taxes. Also, depending on your corporate structure, consider paying for a payroll service to calculate and withhold taxes per paycheck automatically.
#2 Focusing On The Skill And Not On The Business
When entrepreneurs first have the idea of going into business for themselves, often, it’s because they have a skill that they can offer to the world. For example, a web developer will open a business to make websites as a way to put that skill into use.
Many aspiring entrepreneurs focus on honing that skill to be laser-sharp during the early days of the business. Continuing with the web developer example, the entrepreneur may spend copious amounts of time learning how to code in the hottest new language with the hopes of attracting new clients.
The problem with this approach is that focusing on the skill doesn’t advance the business. You can be the best web developer in the world, but if nobody knows your business exists, that’s a problem!
Instead, aspiring entrepreneurs should focus less on their skills and focus on learning what to do to run the business successfully. Instead of delving deeper into what you already know, dive into what you don’t know – like balance sheets, cash flow statements, articles of incorporation, and so forth. Learn advertising, marketing, how to sell, and how to create compelling sales funnels. These are the vital attributes that will make your business a success! (Need help learning these skills? Click here for Elisa Plan’s Business Services!)
#3 Poor Customer Service
If Amazon irritates one customer, 100,000,000+ other customers will still buy from the e-commerce giant. If you’re starting your business and have poor customer service, that one negative review could destroy your reputation before you begin!
Therefore, new entrepreneurs must make sure that their first customers have the best experience possible. Only by hooking your first customers will they go off and tell other people, which will create a snowball effect of word-of-mouth advertising. Additionally, only by providing a fantastic experience to your initial customers, will you generate the positive reviews and buzz necessary to thrive in your business!
#4 Thinking A Business Will Make You Rich Fast
Most people start a business with the hope of getting rich – or, at least, having more abundance than they do now.
Unfortunately, a business will not get your rich fast. It takes a large amount of dedication, hard work, late nights, and overcoming challenges. By starting a business, you’re not signing up for a get-rich-quick scheme. Instead, you’re signing up for another job, which will probably be more challenging – at least to start – than the one you left.
With that said, even though your business will not make you wealthy fast, it is infinitely rewarding in so many other ways. To be able to live your dream and be free of a traditional boss and 9-5 work schedule is advantageous.
Avoid These Mistakes In Your Early Entrepreneurship Days
If you want to maximize your chance of success, please avoid these mistakes in your earliest days of entrepreneurship. Focus on your taxes and ensure you are doing those right. Not paying attention there could cost you thousands of dollars in the long-run and jeopardize your entire business. Focus on what it takes to successfully run your business, not just improve whatever skills you have. Running a business is much different than being an employee. There’s so much more you will need to know and do!
Quality customer service plays such a vital role in the success of any business, but even more so in one that is just starting. Early negative reviews can sink your dream before it gets off the ground.
Finally, know that your business will not make you wealthy overnight. It will require lots of hard work, dedication, and grit. You will have late nights, and you will have ups and downs.
In the end, though, if you avoid making these mistakes and build your company, there’s nothing that beats being able to follow your dreams! Entrepreneurship is always a worthwhile goal!