What are some of the most common mistakes you see with people going into small business?
Basically I think there are three. The first one is that they're going into the business under-capitalized. They put everything they've got into the business at the very start and they don't have anything to fall back on. If they just had some high limit credit cards that were fairly clean to have something to fall back on to pay the bills when the business takes off a little slower than expected.
The second problem I see is co-mingling funds: paying personal expenses out of the business bank account and paying the business bills out of the personal bank account. You have to keep them separate and you have to treat the business as a separate entity and let it stand on its own.
The third biggest mistake I see, and this cripples most young businesses, is that owners take too much money out of the business in the early stages; where they leave the business under capitalized and no longer have the money needed to replace the product on the shelf or to expand into new areas. That is the kiss of death to a young business.