Common mistakes to avoid when starting a business in Michigan
Your new business can be successful right from the start.
Starting a business can be very stressful. Most people who start a business need some type of assistance. Here are some common mistakes to avoid when starting a business, which will help businesses be successful right from the start.
Taking and not taking advice
Starting a business is a huge undertaking and could have immeasurable results. When entrepreneurs are in the start-up stage they sometimes forget to seek advice. Not taking advice is a common mistake of small business startups. Good advice can come from many sources: Michigan State University Extension and the MSU Product Center are invaluable and often free resources startups can take advantage of. You can also seek advice from SCORE members or the Michigan Small Business & Technology Development Center or other small business owners. Advice from these sources is usually sound.
However, sometimes start-up entrepreneurs take advice that seems sound but, in fact, is not good advice. Entrepreneurs sometimes take advice from people who do not understand start-up steps, or the advice is given so the giver can profit from the entrepreneur. For example, an entrepreneur takes start-up advice from a property agent who will then rent the entrepreneur space for their business. Or the entrepreneur will take advice to open an unemployment insurance account even when the entrepreneur has no employees.
Using and not using a lawyer
It goes without saying but sometimes you need a lawyer to get the job done right. Some entrepreneurs will try to organize their business as an S corporation without the assistance of a lawyer. This is not a good idea. The articles of incorporation are what make the corporation what it is and this task should be completed by a competent person familiar with the laws of the state. These articles and bylaws need to be error free.
However, sometimes lawyers are not necessary. The mistake is made when using a lawyer for simple tasks that should be completed by the entrepreneur. For example, organizing a business as a sole proprietor can be done by virtually anybody. It’s a simple process with minimal steps. For example, I worked with someone who hired a lawyer to obtain her Federal Employer Identification Number (FEIN). She was charged $129 for this service, which took three days. You can obtain a FEIN for free in just minutes using the online service provided by the IRS.
Writing and not writing a business plan
Business failures can often be attributed to a lack of planning. Therefore, writing a business plan—or better yet—business planning, is an essential component of management. Business planning requires an entrepreneur to clarify his or her thoughts, identify strengths, understand competition, and map out a marketing strategy. Using this business plan, therefore, will allow an entrepreneur to measure progress toward his or her goals.
Sometimes, however, writing a business plan gets in the way of actually getting the business up and running. This happens because people have been told multiple times that they must have a business plan to be successful. This is not always the case. Entrepreneurs who get bogged down in business plan writing forgo the most important thing in business success: just doing it. Developing a business plan, or if I might use my business training lingo—executing the plan—is far more important to business success rates than the literal writing of a business plan.
Now, just go out there a start a business. And be successful.