7 Traps to Avoid When Starting Your Business by Melissa Chaika Sobel

7 Traps to Avoid When Starting Your Business

by Melissa Chaika Sobel
Friday, May 20, 2011

provided by
Yahoo Small Business

While economists continue to debate whether we're truly rising out of the recession or entering into a double-dip, one thing is clear: The employment sector is still in a slump. The strongest job growth seems to be in the small business sector, which has accounted for 65% (or 9.8 million) of the net new private sector jobs created in the US between 1993 and 2009, according to the Small Business Administration. The small business sector has actually seen a surge in activity: Research from the Kauffman Foundation indicates that the number of American businesses created in 2009 marked a 14-year high, surpassing the number of businesses created during the 1999 and 2000 high-tech boom.

If you're thinking about starting or joining a small business in this economy, here are seven traps to avoid:

1. Don't let the economy get you down. 

2. Don't think that an idea equals a plan. 

3. Don't be an island. Though entrepreneurs tend to be well versed in a wide variety of areas, even the most skilled entrepreneur cannot expect to be an expert in every aspect of business. 

4. Don't expose yourself to unnecessary financial stress. Starting a business can be extremely costly.Don't quit your day job too soon, seek outside investors in addition to your own personal assets, and consider lower-cost options for starting your business. 

5. If you build it, they may not come. Having a great idea and even a great skill and product are very useful in starting a business, but you also need to have a carefully thought-through marketing plan. Customers won't just come to you. You need to think through all of the tactics at your disposal — from newspaper and radio advertising, to online marketing, to good old-fashioned referrals — to consider how to acquire customers and then turn those customers into repeat buyers.

6. Don't launch without specific goals in mind. 

7. Don't be afraid to fail. Many of the most successful entrepreneurs failed before they were successful, and most have had significant failures along their paths to success. Henry Ford failed multiple times before finally launching his successful car company, and Bill Gates and Paul Allen formed a firm called Traf-O-Data before going on to create Microsoft.

Fortunately, more new businesses succeed than fail. According to the Census Bureau, nearly 7 in 10 new small businesses survive at least two years. What's most important isn't whether you succeed or fail in your intended milestones, but rather that you assess and learn from your actions along the way so that no mistake — or spectacular success — takes place in vain