Bankaholic: Entrepreneurs are the brave souls who make our economy go, or at least they were when our economy was actually going anywhere. Especially in this currently questionable financial climate, starting your own business is undeniably a dicey proposition. Start-ups go out of business all the time, often before they even have a chance to even really star up at all. The main culprit in the savage slaughter of these young establishments is the same perpetrator behind the bulk of our fiscal difficulties: Debt.

As an emerging entrepreneur, it is very easy to quickly accumulate debts that are substantial enough to kill your burgeoning business before it even gets off the ground. But it does not have to be that way. Take the time to examine your business workflow and you will likely discover a number of extraneous costs that can be eliminated to improve the health of your bottom line.

Here are eight common practices that lead to common results; learn to avoid them and you will be uncommonly successful.

1. Not sticking to the necessities.

As good a place to start as any, this is an all-encompassing, catch-all principle. Be a good bootstrapper by spending money only on what is absolutely necessary to operate your business.

2. Trying to do too much too soon.

If you jump the gun and attempt to launch too many projects at the same time, your limited capital will severely limit the time and budget that can be devoted to each distinct venture.

3. Not designing for scalability.

There is little worse than achieving initial success only to be undermined by your initial lack of vision and poor preparation. If your business design cannot be scaled up when you hit it big then you may be forced to absorb all sorts of unexpected expenses as you are attempting to redesign from scratch.

4. Failing to delegate.

Always remember, you’re the big idea man; don’t spend your time performing tasks that could be done just as well by a cheap hired hand.

5. Buying in bulk.

If you are starting a small business, don’t worry about having a year’s supply of copy paper on hand the first day that you hang up your shingle. You will have all sorts of expenses in the early stages of your start-up and you will need all of the ready cash you can keep your hands on.

6. Paying your bills late.

Whenever possible, meet your expenses with the cash that you have one hand. Rack up big bills on that shiny new business credit card and you could end up putting as much money towards accumulated interest and late fees as you are towards growing your business.

7. Throwing away your receipts.

It is difficult for many entrepreneurs to learn to separate their business expenses from their personal expenses, and this can end up costing a new business owner thousands of dollars in lost tax deductions. Be fastidious about saving your receipts and you will be in much better shape come tax time.

8. Failing to collect accounts receivable.

Sure you want to be the nice guy as you are starting your new business, but you need to make sure that you get paid as well. With the available tools for notifying clients of payments that are due, there is no excuse for not being on top of your accounts.

8 Easily Avoidable Causes of Business Debt [Bankaholic]

• 1 Comments

  

Comments

Great article. Ref point 4 - I'd add that delegating low value tasks is only part one. Building a high quality team is equally important as, whether you're a delegator or not, there simply aren't enough hours in the day to do everything yourself, even if you want to. So, at least as far as I'm concerned, if you want to succeed, make sure you have the right team and individuals to help your business achieve its goals.

 Posted by: Will - ArenaFlowers.com at March 29, 2008 7:13 PM

 Add your own comments

Name:

Email Address:

URL:
Remember Me? YesNo

Comments: (you may use HTML tags for style)

What next?

 Digg it

 Save This Page

 Subscribe to GetEntrepreneurial.com

 Leave a comment

Next Article: 10 Tips for Student-Entrpreneurs »

Previous Article: Tax Deductions: One Way to Minimize Self Employment Taxes »

Steven Teo is a GE Network Expert. View Steven Teo's profile or read more articles from Steven Teo. Learn more about the GE Experts Network.

Have an expert opinion on issues entrepreneurs and small business owners face everyday? Join the GetEntrepreneurial.com Experts Network and share your expertise with the community!

The new GE Experts Network is inviting seasoned entrepreneurs and small business owners to come on board and contribute small business advice to our community of aspiring entrepreneurs. If you have an effective way of generating sales or you know how to use social networking to connect with your customers, join us in providing wider entrepreneurial content that would benefit small business owners worldwide.

Click Here to Learn More >>

Related Articles

 Local Paper Wrapper » Inhabitat: Here’s a source for gift wrap paper that is as beautiful as it is eco-conscious. Known as The Local Paper, these...

 Wine with Burgers » Iconoculture: It’s hard to speak pretentiously about terroir with secret sauce dripping down your chin. Los Angeles-based Learn About Wine’s Blind Date...

 Reknit Your Old Sweater » Springwise: Each month, Reknit will unravel old sweaters and re-knit them into a different item; this January, it's scarves. Consumers begin by...

 Marbling Art on Stone » Hurriyet Daily News: Saadet Erciyas, a female entrepreneur from İzmir, and her team are creating decorative products by using the marbling art...

Need more brand new promising business ideas and innovations around the world you wish you'd thought of? Visit CoolBusinessIdeas.com now!

Ever wanted to be the CEO of your very own Starbucks or Amazon.com? Fire your boss and be your own boss? Now you can, with BIZNESS! - the free biweekly business newsletter about new business ideas, opportunities and innovations from around the world. More than just new business trends, BIZNESS! helps the aspiring entrepreneur (you!) with small business advice, business tips, and entrepreneur resources and opportunities.

   Subscribe for free now!    

---