Plenty of factors can contribute to a business venture's demise. Sometimes it's a lack of consumer interest; other times it's a matter of bad marketing tactics. But perhaps the most deadly contributor to startup failure is not knowing how to manage your business finances.
"In many instances, [financial mistakes] are due to poor financial planning on the front end of starting the business," said Marc Price, business author and director of operations atExpertBusinessAdvice.com. "Entrepreneurs underestimate the true costs of launching the business. Subsequently, working through initial growing pains that may transpire after the doors are open can be threatened without proper funding."
As an entrepreneur himself, Price knows how easy it can be to get your business into a financial pitfall. The co-author of "Business Finance Basics" (Nova Vista, 2014) shared five common financial management mistakes small business owners make, and how to avoid these errors. [15 Creative Financing Methods for Startups]
Price said his best advice to new and aspiring entrepreneurs is to learn from fellow business owners and financial professionals.
"Learning from others can never be underestimated," he told Business News Daily. "Make it a habit to reach out to other small business owners and ask for advice and opinions on their own previous experiences. Additionally, seek out industry professionals [such as lawyers, accountants, bankers and real estate experts] to help guide you through the labyrinth of the endless financial pitfalls that could be looming. This process greatly mitigates your failure rate and puts you on a proper path for financial success."