“You need to spend money to make money.” It’s true investing in your business is necessary.
However, investing too much too soon is often cited as one of the top reasons for business failure.
In those fragile first years, it’s more important to focus on acquiring new customers and proving your business model works than it is to over invest in your endeavor.
How to Solve This Money Management Mistake:
Much like over investing in a new hobby by buying gear just to lose interest in 3 months; many new business owners overspend, buying more equipment and tools than the business can sustain.
Unfortunately, this means starting with more debt and eroding your profit margins before the business has a chance to prove itself.
Before investing too much at once, scrutinize your business model and ask, “Am I creating a sustainable plan that’ll generate profit that can be reinvested over time?”
Start small to validate the business, and scale only when necessary and sustainable.
For the next 12 mistakes see the Intuit article by Kat Boogaard for QuickBooks: https://quickbooks.intuit.com/r/financial-management/money-management-mistakes/
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