Choosing a Business: Common Mistakes

Although there are many reasons why small businesses fail, one of the most common is in choosing a small business. A lot of people simply make the wrong choice. To help you avoid that error, here's a look at three of the top reasons why wrong choices are made.

Error #1: Converting a hobby or interest into a small business without first finding out if there is sufficient demand for the product or service to be provided.

Error #2: Starting the business without adequate planning. Your success is not guaranteed just because you've found a market opportunity that also takes advantage of your skills and experience. There are many other considerations. For example, you still have to figure out if you can raise enough money to get started and whether you can withstand periods in which little or no revenue is coming in.

Error #3: Resisting the urge to ask for help. Since you're reading this material, you may have already avoided this pitfall. A lot of people, however, are reluctant to ask others for advice in choosing a business, either because they're too proud or because they don't know that help is available. Help is out there, and, if you shop wisely, it won't cost you an arm and leg to get it.