Overcoming the 10 Most Common Mistakes of Entrepreneurs

If you’re looking to launch a new company, overcoming mistakes needs to be a big priority, because you will make them. Everyone does, and the key is identifying the most likely mistakes and avoiding them, so you continuously get better at making smaller ones. If you want to make sure you bypass or overcome the ten most common mistakes entrepreneurs make, you need to know what they are and what will sidestep the issue.

First, always use a contract. A lot of people are misled by advice saying you don’t always need one, but the fact is the people who want you to operate without a firm agreement are usually looking to take advantage of that situation. You’ll also want to create agile systems that empower key decision-makers in your company, so you don’t have to micromanage every choice. Too much hierarchical decision-making slows down your ability to respond to issues that arise, making it harder to focus on overcoming mistakes and limiting their damage.

Make sure you understand the payment terms you agree to, for both incoming and outgoing expenses. Many entrepreneurs start business unaware of the ins and outs of different purchase agreements, and as such, they don’t plan properly around the wait times involved in invoicing and payment. You also want to cover your bases legally, but to do so in a way that doesn’t undermine your bottom line. Don’t wait for legal trouble to hire an attorney, but don’t have the attorney do anything you could handle yourself either.

Along with always having a contract comes three other points—make sure you understand the differences between employees and independent contractors, because accidentally tasking contractors with the obligations of employees makes them employees in some jurisdictions. Also, set firm boundaries around your banking so you’re not mixing business and personal expenses, and if necessary, set up a formal stipend to yourself to keep those expenses separate. Keep your legal agreements handy for new clients, contractors, vendors, and employees, too. That way you won’t accidentally let paperwork slide.

The last two are simple but hard to master. The first is be ready for new types of taxes, especially if you plan on operating in multiple locations across different local jurisdictions. The tax laws are always in flux, and the more places you operate, the more complex your commitments become. Last of all, make sure you invest in the right tools. Get specialized software and hire experts with certification in key skills when you need them. That’s what it takes to make sure you’re set up for success when it comes to overcoming mistakes.