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Four Common Startup Money Mistakes

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This story appears in the October 2011 issue of Start Up.

Money SmartsStartup businesses come in myriad different forms, but each have one thing in common: They need proper financial management in order to survive. Small-business finance expert Steve Strauss, author of Get Your Business Funded: Creative Methods for Getting the Money You Need, outlines four common money mistakes everyone should avoid:

1. Underestimating startup costs. Strauss says the most common mistake he sees entrepreneurs make when launching a business is underestimating the amount of money they will need. Startup costs, repaying investors and even the founder's salary are all areas where entrepreneurs are too frugal in their estimates, he says. When the reality of the true cost of running the business hits, many find their budgets stretched--sometimes beyond what is sustainable.

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