First time entrepreneurs take many missteps when running their new business. The smallest mistake costs you money and even your business. Knowing pitfalls to avoid erases one channel of worry and leaves you free to concern yourself with other aspects of your business.
Make sure your business is properly licensed. This is a common oversight many make during the conception of a business. Misconceptions include licenses and permits are only required by large scale businesses ran from outside locations. People also complain about the upfront costs. The type of license and permit required to run your business varies from state to state. It is important to note whenever you provide goods or services to the public you need permission and regulation. Your state and federal government require their financial share in your business. This share is commonly referred to as state and federal taxes. Pennsylvania recently provided amnesty to business owners who never applied for their business license or tax identification number. It may take a while but eventually your non-licensed business will be discovered. You will be in trouble. Make a call or take a trip to the license & inspection office in your city or county and determine what you legally require to open your business.
Not advertising enough is the death of your business before it starts. Business is not a "Field of Dreams." You cannot simply wait for them, the paying public, to come. Great advertising is bought or totally free but requires dedicated action and time on your part. When creating a business plan and calculating your budget, understand a large portion of your investment goes into marketing and advertising. You must inform the public why they should utilize your services or product instead of the competitor. No customers, no business.
Receiving your fist business payment is exciting. Don't cash that check or money order-deposit it into your business account. Any appearance of mishandling funds puts new businesses in a bind. A check or money order made out to your business should not be cashed out by an individual. This puts a flag up to the IRS that your business may have shady financial dealings. Should your business run into financial difficulty and need to declare bankruptcy, your financial records are reviewed by a judge to determine if personal and business finances were separate. If that judge determines you used your business funds to finance your personal life, you and all your business partners are held liable for debts incurred by the company. This information is not discovered by many new business owners until its too late.
Running a business can be exciting and heady. It is important to follow proper procedures so your dream is not terminated before it has begun.