Virtual Entrepreneur

ThomasNet Industrial News Room:
As the global economy expands, there is reason to believe that small businesses may have some competitive advantage. That is, if entrepreneurs don’t fall prey to these common start-up pitfalls.

Start Underfunded
Cash flow is critical to a startup business. It is also the most common reason new businesses don’t last.

Think about how you’re going to finance your startup business initially: bank loans, venture capitalists, angel investors, SBA government grants, your own savings – all are options, so figure out which is best for your situation. About 53% of new small businesses begin in the home with less than $10,000, according to the National Federation of Independent Business.

Many start with leased or used capital and equipment. About 3% are franchises.

Also consider easing into the business by doing it part-time until you know it will make enough money to support you.

For tips and lots of other information related to cash flow, check out the Startup Financing and Guides to Raising Money sections of Entrepreneur.com.

(See today’s How to Find Good Money.)

Do It Alone
Small-business employees can make or break the business. Unfortunately, a common problem new business owners have is managing their employees effectively; not only do they make hiring mistakes, but they also struggle to retain good employees.
No one has the skills (never mind the time) to do everything themselves. ‘You need to understand what it is that you bring to the table and what you need to surround yourself with,’ Evan Carmichael writes at YoungEntrepreneur.com.

From day one, think hard about the candidates who can be brought on board to help you meet your vision. ‘By getting people around you who complement your skills, you will be able to achieve your goals and have a lot more fun along the way,’ Carmichael writes.

And if you want to keep good employees, be sure you have a system in place that rewards their efforts.

(See today’s Making the Right Hire.)

Don’t Plan/Research Properly… read on.

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