5 Potentially Dangerous Decisions to Avoid When Starting a Business Steer clear of these minefields in laying the foundation for your newly launched firm.
You're ready to launch a business and anxious to get things under way.
Keep these things top of mind to steer clear of the roadblocks and pitfalls and making decisions that could create more problems than solutions.
1. Picking a partner who isn't going to work out.
After starting a business, you'll find some people will want to join your party. Sometimes this can be a good thing. Other times, it won't be so much so.
In addition to considering the facts about a potential partner's background and expertise, rely on your gut instinct about whether someone is a good fit. As much as you might want things to work, sometimes you will have a nagging feeling that it won't. Go with that.
2. Taking startup capital when it's not needed.
Sure it's a confidence booster that someone believes in you and has offered to invest in your company. But when your company starts to do well and you realize that you didn't need the startup funds you received, you won't be happy knowing that someone else owns 25 percent of the business.
3. Staying at the original job.
You can't do two things at the same time. Once you know for sure that you're ready to take the leap and go out on your own, sever ties with your employer so you can devote 100 percent of your time to your business. If you're not fully invested in it, the startup won't be able to take off the way you need it to.
4. Hiring family and friends.
Your sister-in-law is really good with numbers. Your college roommate is really smart. And both need jobs. But do they have the requisite skills needed for the business? You may figure they're sufficiently smart and motivated enough to figure things out, but don't take that risk. If they have actual experience and expertise related to your product, that's one thing. If they don't, take a pass.
5. Buying a lot of equipment and supplies.
Sure it's fun to have a reason to buy the very latest electronics or the most up-to-date equipment. But seriously consider if it's needed or if you can make do with the existing computers and skip the completely decorated and supplied office. Hold off on purchasing to see what you'll really need on a day-to-day basis.
So start your business. But go in with your eyes open about what makes sense and what does not. Making solid decisions from the outset will create a strong foundation for your business that will be easy to build on and help it succeed.