We bring to you few most common money mistakes that entrepreneurs make so that it can help you avoid them.
Underestimating the Expenses
Building a product is not enough, you also need to add up insurance cost, cost in obtaining the patent rights, cost of registering your trade mark and like such, there are several costs that many entrepreneurs tend to forget to add up to their cost list while preparing budget. There are few other costs that increase your cost of operations. These are payroll withholdings like Medicare, insurance and income tax. Adding up these may increase your employee cost by one-fourth times.
Do not Test before they Invest
The eager entrepreneurs do not tent to spend their time and money in R&D before developing a product. They invest a lot of money to make their product perfect, but does much before testing their product need in the market. It is better to make it mandatory to make a cross check of the product in the market to know its utility in the market and among your target audience.
Failing to Plan for the Worst
It you have a great plan for every aspect of your business and you have never thought of anything unlikely happening to your business, then you are no different than the usual young chunk of entrepreneurs. You need to plan for the worst that can happen to you and your business. Prepare a reserve for such situation wherein you may be required to pay to your employees even if your production is held for some reason for some a short duration. Several such hidden situations hold a lot of cost for letting your business to survive.
The Running Cost
Entrepreneurs do not understand all the costs of running a business. They take in consideration the variable costs and fixed costs, but forget to add the cost like infrastructure costs, legal and accounting. With regard to these expenses, they need to continuously monitor their business budget on a regular basis checking out how the revenue figures on both sides of the ledger and journal to know if there is any need for adjustments.