You should not buy a business if you have no prior knowledge of how it works, or it is something you aren’t familiar with. You don’t need to know everything, the current owner or franchise company can provide specific training. But you should understand the primary aspects of the business. For instance if you know nothing about toxic waste disposal, and don’t even have a working knowledge of what toxic waste is, this probably isn’t a good fit for you.

The current owner of a business or the franchise company will probably make running their business sound very easy. It is up to you to ask the right questions and understand your own limitations.

If you’re close to buying a small business, see here for a checklist to ensure you are asking the right questions and that you examine the right items and documents within the business.

The Transfer of Knowledge

If you are buying a business that is seasonal, in other words it has a specific few months during the year to make a profit, then you should contract for at least a full year of time and support from the current owner. If the business isn’t seasonal, then a minimum of three months support should be part of the contract to buy the business.

Make sure you specify in writing what type of support you are buying. Is it a monthly phone call, a couple of hours a week at the store, a set number of hours per month? If you don’t specify, they could take off for a month in Hawaii and call you at the end of your trip. If you can, arrange the contract so that you hold some portion of your down payment until the current owner has fulfilled the contracted support. This way if they don’t provide what they promise, you would have some money to seek a consultant if needed.

Know Your Limits

Before you start looking for a business to buy, certainly before you start negotiating for a business, you need to know what your limit is. Have a high end price in your head that takes into account what the business is worth, and what you can afford to pay. You don’t want to go into the business with no money to buy product, advertise, or make any needed upgrades or changes. It isn’t the buying of the business that is important, it’s making a viable income once you have the business.

Know What You Are Buying

Often when you buy a business you get the leases, the inventory, any open invoices that the company is liable for, as well as any lawsuits, tax liabilities, and more. This can be debts that the company has proof of, and any that might show up after you close on the deal. There are also ways to purchase only the assets and the owner’s shares in the company with out being responsible for liabilities.

If you purchase the business in this manner, then you can still be required to address and pay for any current or future lawsuits. Even if the current owner states in the purchase contract that he will be responsible for anything that happened before you bought the business, if something happens to him or he doesn’t have the means or money to address these lawsuits, then it still will come back to being your responsibility.

Make sure you take the time and effort to find out about potential problems before you close on the business. Check with the better business bureau, the owner’s liability insurance company, and even take the time to check if there are currently any liens on the business.

Know what you are buying may belong to the employees, especially if you are buying a service company. It is important to get a feel for who plans to stay, who plans to retire or take the customers and start their own business as your competitor. Often buying a service company can be just a bit risky. If customers hated the prior owner, it will take them some time to warm up to you. If they liked the prior owner, they may not be happy with the way you do things, and if you try to change something…your customers may all jump ship. It is really important to do your homework when you are buying a small business.

The following are the top 10 mistakes made by small business start-ups:

1. Perhaps the biggest mistake most new start-ups make is launching their venture without adequate funding. When starting your new business, you need to have a solid grasp on what your start-up costs will be, including supplies, utilities, labor, shipping, services, etc. Then you need a little extra for unforeseen events.  If you think it will take time before your business starts turning a profit, you need to have money on hand to handle operating costs until your venture gets on solid financial footing.

When getting your business set up, make sure to establish some good relationships with lenders so you can get access to more credit at reasonable rates if you need it.  Being able to tap into their resources will help you get over any early humps you may come across.

One of the best ways you can impress lenders and investors is to have a solid business plan. You should be able to show investors a realistic estimate of the costs involved in starting up your business, monthly expenses and how much money you intend to make. The better your business plan, the better your chances are of securing the credit you need to cover start up expenses.

Starting off with a sound warchest can keep you from the agonizing defeat of having to shut down your business for lack of funding right when it’s about to turn the corner into profitability.

2. Employment mistakes are another killer. Your early employees will set the tone for your business, often being the first impression customers and suppliers have of your business. They’ll also be role models for future employees. If you get the wrong people early into the life of your business, the results can be disastrous.

You can help get your business off to a good start by rigorously screening employees during your hiring process. Cover all the bases. Check references, conduct thorough interviews and even test employee skills if possible. Weeding out the bad apples before they’re hired can help you get off to a much smoother start.

3. To successfully launch a new business, you need to have a thorough understanding of that business. Do your homework before hanging out your shingle.  Understand your market, your competition, your products and services, your supply chain, and every other aspect of your business. The more knowledge you have, the better you will be able to handle situations that will arise with competence and confidence.

4. Failing to plan for success can be just as troublesome as failing to have a plan B when things go awry. Many small businesses that achieve early success founder when their management is unable to make the right moves when things are going well – things like hiring new staff, expanding product lines, having the capacity to handle increased volume, proper accounting practices, etc. Before starting your business, you should identify key growth milestones and what needs to be done to keep your business on track when these milestones are met.

Taking a look at how businesses similar to yours have grown can be helpful to you in creating a template for your own company’s success. Read trade publications and ask questions of industry veterans to help you chart a better course for your company’s success.

5. Getting the pricing on your products and services wrong is another common start-up error that can have serious problems. If your prices are too high, you’ll lose customers. Too low and you won’t be able to cover the costs of doing business. Again, this is where doing your homework and knowing your market and suppliers will be important. It also pays to have a firm knowledge of the costs of doing business not associated with purchasing products or supplies, such as labor costs, taxes, utilities, etc. Having a firm grasp on the numbers helps you set prices that won’t scare off customers but will keep a roof over your head.

6. Clashes among partners. Going into business with someone is like getting married, in order for the partnership to succeed their must be mutual respect, committment and willingness to compromise. Clashes between partners can kill even well-established businesses, so just think of what they can do to fledgling businesses. Minimize clashes between partners by having clear lines of communication, mutually agreed upon goals and by defining each partner’s area of responsibility and authority.

7.  Not having a well thought-out business plan can be a fatal error for a new business. Failing to establish specific goals for your business and identifying how you will reach those goals can cause a business to be rudderless and easily founder. When preparing your business plan, don’t just go through the motions. Cover every aspect of the standard business plan thoroughly. You’ll find this preparation useful when you run into problems.

8. Failing to market. Even if your marketing budget is small, you need to get your name out there. Use the free media (social networking, e-mail campaigns, etc.) as much as you can and also see if you can pitch an interesting angle about your business to a local newspaper or television station. Local media organizations are always looking for content, so a good pitch can get your store some free airtime or newsprint.

Remember, if no one knows about your business, no one will frequent it.

9. Failing to have a website or spending too much time and too many resources on your website can also be a small business killer. When planning your business, you’ll need to determine how important the Internet could be to your service, and how much you need to put into it right away. For some businesses and markets, a website is only of small use in the early stages of the business, while in others having a good website from the get-go is important.

This goes back to your business plan. When coming up with your business plan, you need to determine how important a website will be to your venture, and how many resources you can put into it in the beginning. It’s a good idea to check out what your competitors are doing and when businesses similar to yours outside your area are doing.

Building a basic website is an easy DIY project that just about anyone with a rudimentary knowledge of computers can accomplish. As your business grows, you may want to hire a web developer to spruce up the site and make it more professional.

10. Poor bookkeeping and accounting is another problem for start ups. When you get started, you need to account for every penny coming in and going out of your business. You also need to make sure that all taxes and government fees are paid to avoid trouble with the authorities. Becoming adept at bookkeeping yourself or hiring someone who is an important mission for any start-up.

These 10 mistakes should not discourage entrepreneurs from starting their ventures. Great companies have been built on shoestring budgets and many great managers have learned their business on the fly. However, by firming up as much as you are able in the 10 areas listed above, you can greatly increase your chances of succeeding.

While this seems like such a basic statement, how many times have you gone to a company’s website and couldn’t find the telephone number or address of the business without a lot of searching, and sometimes never?

Where Are You?

The point of having a small business website is to get business. Don’t make a potential client or customer search for your contact information, you phone number and email should be highly visible on every page of your website. If your small business has a store front, or any physical location where you want customers to come in, then this address should also be posted along with the phone number and email.

Put the contact information in the header, footer, and on the sidebar of each web page. There is nothing more frustrating for a potential customer than trying to figure out how to get a hold of you. Having easily available contact information also helps the customer feel as if you are a real business.

Who Are You?

Provide a little personality to your website. Pictures and videos can help you do this. If you have a store front or office, take a picture of it and clearly label it as your business. If you have employees, do a good group photo and post that too. If it is just you, you may want to consider having a professional head-shot done, and get the digital rights to the picture so you can post it on line. Make sure the pictures are clear, and are good shots. You don’t want to project a sloppy, out of focus corporate personality!

Often a short video will allow your customers or clients to meet you before they buy something or hire you to do something. For instance, if you are a handy-man, do a short video on a home maintenance topic…say changing the furnace filter…then make sure to give the phone number or email if they have any questions.

If an instructional video won’t work for your business, why not try a video showcasing a few happy customers? The inexpensive digital video cameras available today make this an inexpensive tool for highlighting your personality, and your business.

What Are You Selling?

Your home page should not be your blog. Blogs are great, but they don’t often highlight exactly what it is you are trying to sell. Your main web page should be a static page or something like the WP-Sticky plugin offered by WordPress found here.

This takes your blog users first to a static page that you can use to describe the business, and or your product or services, with, of course, your phone number, email, and possibly your address. Then they can click on your latest blog post.

As a small business owner you want your homepage to let people know who you are and what you are selling or the service you are offering.

Less is Very Often More

Unless your small business is promoting other companies or people, you will find that putting up two high quality articles or posts per month will get you more than Tweeting or blogging every day. This can be sales or service reminders, or articles written about something that relates to your business that customers might enjoy or get knowledge from.

Do you want your tax account to Tweet you a couple times a day, or would you rather he worked on your taxes and published a few hints or guides each month on how to save receipts or what items might be tax deductible.

Predictable is Better

Don’t get cute or creative with your website navigation. Make it easy on your customers and put the navigation where they expect to find it, at the top of the page or in a left sidebar. And home means Home, and Contact or Contact Us is much better than some clever tab labeled Ravyn’s Nest that no one understands meant this is where your contact information is located.

Keep it predictable so that clients won’t have to search for information and get frustrated with your creative mind.

Links Are Important

You obviously don’t want to advertise the competition, but a small business you know and use or that compliment your offerings is a great tool. Ask these businesses to share links, which means that you put a link and description on your site for their business, and they put one on their website for your business.

Ask For Business

So you’ve got all this information about your business or product on your website, now you need to ask the customer to click here for more information, click for contact information and ask them to contact you, or to click here to buy. You have to be clear in your own mind on what you want each customer to do once they visit your website, and then include several “calls to action” inviting them to do just that.

If you are selling something, sell it. Ask the customer to buy and provide the means for them to do so. If you are providing a service, tell the customer to call or email now for a free quote, or to set up an appointment. Invite them to contact you and they will be more inclined to do so.

Attempting to handle a wide market is generally too difficult for smaller businesses. Instead, smaller companies are better served by dividing the potential demand for your business’ goods and services into more easy-to-handle market niches. Once you’ve found the right niches, you can offer highly specialized products and services to select groups of consumers, allowing you to gain more specific knowledge about your customers and serve them better, charging a premium for this excellent service.

What is a niche?

A niches is essentially a specialized market, for example a children’s boutique specializing in clothing for plus-sized children or an accounting firm specializing in financial services for farmers would be niche businesses. In a crowded marketplace, having a niche can separate you from your competitors.

For small businesses, focusing on a niche can be very profitable because focusing on a broader audience may be impractical for smaller companies. By focusing your efforts to appeal to a specialty clientele, you can exploit blind spots in larger companies’ strategies and carve yourself out a very profitable area of business.

When choosing a niche for your small business, there are a number of factors to consider, such as:

Your knowledge: By focusing on an area of business that you’re skilled in or have special knowledge of, you gain the benefit of working to your passion and interests and having a significantly reduced learning curve as you get your business off the ground.

Your targeted audience: Clearly identify who the target audience is for your goods and/or services and what makes them tick. If you can afford it, hire a consultant to do market research on what generational, ethnic and other demographic groups in your target audience want, and how best to market it to them.

Specific products and services: Perhaps the easiest way to create a niche business is by focusing on one specific product or service type within a broader field, or a product or service aimed at one segment of an industry. For example, instead of starting an education supply store, you may start a business aimed specifically at the needs of science and math educators. This specificity of focus allows you to concentrate on serving one set of customers and meeting their needs better than anyone else could. It also allows you to become very well-acquainted with specific products and supply chains, allowing you to become expert in getting the best possible deals for the products you wish to sell.

Advantages of focusing on a niche

For small businesses, focusing on a niche has several attractive advantages. For small businesses just getting started, the narrow focus reduces your costs in acquiring new products or developing services. As your business expands or as you discover new potential niches, you can add products or services, but the narrow focus at the beginning helps you keep your costs low, a major concern when you’re starting up on a limited budget.

Focusing on a specific niche and providing excellent products or services differentiates you from larger, national chains who may move into your area. While customers will know they can get “a” door frame from the local big box store, if they want to get “the” door frame that’s right for their home, they’ll need to come to your shop.

Marketing tips

One way to market your niche is by including it in your business’ name. Having a name identifiable with your niche allows potential customers looking for your services to immediately identify your company as one they may be interested in checking out. Choosing the right location can also be important to your niche, as convenient locations will help you to better serve your client base.

Research is key to the success of a niche business. If you can’t afford a consultant, do the homework on your own. Get on social media sites and do a poll of your friends and acquaintances. Identify a core group of customers and ask them directly about what they need. Find out who your potential competitiors are and find out what products and services they don’t offer or do a poor job at handling.

With an effective niche strategy, you can take advantage of the needs of a specific customer group to insulate your business from big box stores and provide excellent products and services that you can charge a premium for.

If you don’t choose to use the web hosting company’s software, you or your web developer can upload your web design to the hosting company’s servers by following the hosting company’s guidelines, policies, and accepted software. Once the uploaded files have been submitted online to the web host, the website or webpage is available on the Internet for your customers and clients to see.

The tools provided by the web hosting company, and even web building software packages make it easy for anyone to design and build web pages and load them on the Internet. These easy to use web builders allow you to customize pre-made pages, so you don’t need to understand HTML or how to do complicated programming. You can also hire a web designer to design the artwork and technical aspects of your website, which would provide a completely individualized look for your website.

Choosing the Best Small Business Web Hosting Company for Your Needs

There are web hosting companies that will charge just a few dollars per month for your website, and some that will charge much more. Generally the cost of the hosting is dependent on a number of things. Some hosting companies charge very little, but they will add banner ads to your web site, which might be okay if you are doing a personal site, but probably not the best choice for a business. Typically these banner ads would advertise similar businesses to yours, so basically you would be providing space to the competition.

Think about your company’s goals and what you need to accomplish. Will your site have just a few pages, explaining who you are and what you do? Or will you have hundreds of pages detailing product or services and need a shopping cart and some sort of payment method? Often the web hosting pricing is dependent on how much space you will use on their server. (A server is the computer that will hold all your web pages.)

It is also important for you to realize that if you choose a hosting company for your small business and determine after a period of time that you don’t like the hosting company, you can move your domain name and your website to a new company fairly easily.

As you are looking at the different web hosts, make sure you look at comparisons sites. If you plan to build your own website, look at the reviews and see how easy it it’s to use the hosting companies website builder. Some are much easier than others. The reviewers will make statements like the best thing about X company is that it offers unlimited email accounts, if don’t plan on using the email services or only need three email accounts, than this isn’t important.

Decide if you will need 24/7 tech support. If your website is critical to your business, you may not only want tech support, but may also want server redundancy (which means there is more than one server that your website will be stored on, if one goes down, the website is still up.) and other technical and customer support options. If the website isn’t critical, than you may be able to choose a hosting company that has great stats when it comes to up time, (meaning their servers are rarely down) but that don’t provide round the clock service or redundancy.

If you need shopping cart, or a way for the customers that go to your website to buy things, make sure the hosting company allows or supports that option. This includes anything you specifically require for your website.

Summary

The best small business web hosting company is one that will meet your needs, not only for designing and implementing your website, but for making simple and complex changes, as well as for reporting and getting the website listed in search engines.

As you are choosing a web hosting company for your business, look at the types of reports the hosting company will provide. You may want to check at what point browsers are leaving the site, if some pages get more hits than others, and more. Also check what guidelines the hosting company gives you for getting your website noticed by the search engines. This is an important part of driving traffic to your small business website.

However, there are a number of red flags that should rightly discourage you from acquiring another small business. If any of the following factors apply to a small business you’re about to purchase from its current owner, you should conduct further research and investigation or consider backing out of the deal.

1. Misrepresentation by the current owner – If you catch the current owner of the business in a misrepresentation or outright lie about the business, consider all of the potential untruths you missed. Chances are that if the current owner isn’t being truthful about one thing, he or she is probably not being truthful about a number of other things.  While not every misrepresentation is made consciously or with malicious intent, they are certainly a sign that further research is necessaryI. nvestigate other claims that don’t quite ring true, and you may also want to do a more thorough check of the business’ finances and market position.

2. Lack of capital on your part – If you’re buying a business because you think it may be cheaper than starting your own, you may want to reconsider. Even if you’re getting a sweetheart deal on the existing business, chances are that there will be unexpected costs that arise after you purchase the company. Factors such as employee or customer defections, unexpected maintenance, debt payments, etc. may end up requiring more money than you planned on spending. If you’re considering buying an existing business, make sure you have enough capital to make the purchase, and have a little set aside for other costs that may arise.

3. Debt – If you’re assuming the debts of the existing businessowner as part of your takeover bid, think twice before sealing the deal. Be sure to look over the business’ balance sheets to ensure that you’ll be able to make the debt payments and get the profits you need from the business to make the venture worthwhile. Also insist on full disclosure of the amount and terms of the business debt.

4. Need for a big score – If you buy a profitable existing business and maintain its track record of success, you can make a good return on your investment. Typically, you should recoup your investment on a business within three to five years. However, chances are you aren’t going to make the big money you would if you started your own business. Entrepreneurs who begin their own businesses are typically the ones who create the greatest amount of wealth from their ventures. Buyers of existing businesses, unless they make a big turnaround or tap an undervalued asset or market, usually make good, but not exceptional profits.

5. Heavy baggage – While big profits exist for entrepreneurs who can purchase a struggling business for a song and turn it around, it’s not a venture for the faint-hearted or inexperienced. Some existing businesses come with heavy baggage, such as a poor reputation in their communities, a lackluster employee base, legal troubles, zoning or other government regulatory difficulties, a bad location, etc. If there seems to be a lot of baggage involved with purchasing a business, you may want to consider another venture.

The true key to avoiding making a big mistake when purchasing a new business is thoroughly checking out the business and its existing owner. Check court records (which are publicly available) for information about lawsuits against the business or its owner, check newspaper and other articles for potentially negative news about the business and demand balance sheets and other financial information from the existing owner and have your financial adviser investigate them. Also perform a brutally honest assessment of your own finances to ensure that you have the money you need to buy the business and cover any subsequent costs.

According to the Wells Fargo bank, the average small business owner spends about $10,000 in start-up costs. More than half of the small business owners surveyed by Wells Fargo told researchers that they would have had an easier time of starting their business if they had more access to funding.

In the current economic environment, getting a loan for a new business venture can be difficult, as traditional lenders have become extremely risk averse. If you’re a first time business owner, and if your current income or credit is less than stellar, you may have a very hard time in convincing a bank to lend you the start up capital you need to get your business off the ground. There are a number of alternatives to traditional bank loans for your new business, however.

Consider the following alternatives to traditional bank loans when searching for funding to start a new small business.

1. Credit cards – If you only need a small amount of start-up capital or if you’ll be able to repay the borrowed money quickly from immediate sales, credit cards can provide a good source of start-up funding for businesses, particularly for entrepreneurs who may have difficulty obtaining credit from traditional lenders. Beware of high interest rates and over-the-limit fees, however.

2. Family – Family members can provide start-up funding for businesses, and may often be a cheaper and better source of funding than banks or lenders. If you get family support for your business, be sure that the terms of the funding (whether it’s a gift or a loan, etc.) are clearly spelled out and understood by all parties as money disputes can often ruin family relationships.

3. Partners – If you have a great idea for a business, but don’t have the capital to get it off the ground, you may want to consider taking on a partner. A business partner can help provide you with capital, or may improve your chances of securing a loan from a bank or other lender. Make sure to get your partnership agreement in writing and vet your potential partner before taking him or her on, however, as a bad partner can sink your business just as quickly as a lack of start-up capital can.

4. Investors – Another way of raising capital for your small business is by selling an ownership stake to an outside investor. Investors can provide capital, and those with business experience can provide expert advice. Understand, however, that selling an investor ownership stake also gives them a seat at the table and a voice in business decisions. It also could potentially open you up to lawsuits if the business founders or if the investor doesn’t like the direction you’re taking the business. Also, if you end up needing more money the investor could end up buying a larger and larger share from you until he or she is the majority owner. Before selling a stake in ownership, be sure you and your investor share similar visions for your business and do a little due diligence and check out your investor’s track record.

5. Asset sales – If you have a small business concept you really believe in, and a tangible asset you can mortgage or sell for capital, this is another means of raising money for a new business venture. Steve Jobs helped start Apple by selling of a Volkswagen bus he owned, and today the company is worth billions. Assets you can sell or put up for loan collateral include investments, vehicles, land – really, pretty much any tangible asset of significant value.

6. Small Business Administration loans – The SBA makes a number of loans available to entrepreneurs in order to spur certain business activities desired by the government, such as investment in disadvantaged communities. To find out if your small business could be eligible for a SBA loan, contact the Small Business Administration or contact your bank.

7. Mortgages – Start-up capital for your new business can be obtained by refinancing your home and borrowing against the equity in your home. Most people’s homes are their most valuable asset, and present a source of capital for ventures such as starting a business or providing for their children’s college education. However, if you are going to tap the equity in your home to obtain financing for your business, be wary of the terms of the loan you’re getting and also have a back-up plan to help you pay off the debt in case the worst happens and your business founders.

8. Credit unions – Credit unions exist to help consumers take out loans for homes and cars and to help small businesses get off the ground. Because of their mission, and their status as non-profit financial institutions, they may be more willing to make small business loans than traditional lenders such as banks. And chances are that you’ll be able to obtain a loan at a lower rate than you would be able to get from a bank. To get a loan from a credit union, you’ll need to be a member, but in most cases membership is obtainable by just opening an account with a nominal amount of money.

When taking advantage of a non-traditional source of funding for your business, always be sure to be crystal clear on the terms of your loan, partnership, investment, etc. Also get the agreement in writing, if possible. Making sure all terms are clear from the beginning is key to avoiding problems later, whether your business is successful or not.

You can also find funding flexibility in starting your new business by finding costs you can cut or delay and by starting off the business on a smaller scale. With careful business management and cost control, and creative financing decisions, you can find the money you need to prime the pump for your new business.

Probably the most important consideration to take into account when starting a small business is financing. If raising the capital you need to start your business will put your home or retirement savings in severe jeopardy, it may be worthwhile to hold off on starting your business until you’re able to find a source of collateral that won’t leave you in the street if things go south.

Loan rates are also an important factor to consider when getting financing for a new small business. If theinterest rate on your loan is too high, you may want to wait until your credit improves, you can find a partner or until you can find an alternate source of financing to start your business.

Gauging the demand for your potential business is also important. If the local market for your business is already thoroughly saturated, or if the online niche for your products or services already appears to be filled and you’re unable to offer something different from the existing businesses, you may want to hold off on starting your business.

Compliance with zoning and other regulations is also a key factor to consider when starting a new business. If your new venture is on shaky legal ground concerning zoning laws, state health and safety regulations or other rules, you may want to delay starting a business until you can get a black and white determination of the legality of your venture.

Supply chains are important to businesses in that they determine whether the business will be able to meet its customers’ needs. If you can’t get the logistics of how you’ll get supplied with the materials you need for your business, you may want to wait on starting up until you can find a better solution or better location.

Your personal life also plays a role in whether you’ll be able to successfully start a new business. If you’re going through a divorce, it may not be the time to start a small business, as the legal proceedings could put the status of your investment in your new business in jeopardy. Also, significant health problems or substance abuse issues may need to be resolved before you can put your best foot forward in starting a new business.

Buying an existing business

If you’re considering buying an existing business and making it your own, there are a few red flags that might be worth heeding.

For example, if you’re stepping into the shoes of a partner who is departing a business, it’s worthwhile to look into the history of the partnership and the background of the other partner before buying. A history of contentiousness between partners or evidence of recklessness or negligence by the remaining partner may dissuade you from buying into a bad situation.

Finances are another key factor, if not the most important factor, to consider when buying in to another business. You should evaluate your finances carefully to see whether you have the money to fund renovations or changes that may be necessary and absorb losses in the transition period.

Also, while finding undervalued assets and turning them around is a common aim of many businessmen and women, it’s not always attainable. If you’re considering buying a business that’s had some public image problems or difficulties related to its facilities or logistics, you may want to think twice before making a potentially expensive plunge. Consider the problems of the business you’re acquiring and whether you have the skills, know-how and will to turn them around.

While entrepreneurs shouldn’t be discouraged from taking risks and starting new ventures, it is important to consider the risks of a new venture carefully and determine whether the likelihood of success adequately outweighs the risk of failure when starting a new business.

The following are a list of 10 of the most common pitfalls small business owners face as they’re getting their new businesses started.

1. Insufficient capital – Not having enough money to fund start-up costs can have big impacts on your business, leaving you unable to buy sufficient inventory, pay for unexpected costs or make rent or other payments on time. While it is possible to start a business on a shoestring budget if you have an idea that’s going to bring in profits quickly, more often the businesses who don’t start off with enough cash fail because they can’t fund critical needs or they’re left playing catch up for a long time.

To avoid starting with insufficient capital, be sure to check and double check your business plan. Try to anticipate every possible cost that could arise and make sure your business has the capital it needs to address these needs. Also, consider opening a line of credit with a local bank or credit union that you can tap if you need access to funding.

2. Lack of customers – It’s wise not to be too dependent on just one customer when starting a business. While some businesses do quite well catering to just a few high-end clients, becoming too dependent on a single client or small pool of clients increases your risk of failure as your small pool of clients may face adverse circumstances that prevent them from buying from you, or the relationship between you and those clients may change. When starting a new business, try to have a broad enough client pool so you can sustain a few defections without a major disruption of your business. Also, if possible, try to land long-term deals with your customers so you’ll have a steady and reliable stream of revenue.

3. Ineffective marketing – Customers can’t buy your products or services if they don’t know about them. Even though you’ll likely be starting your business on a small budget, don’t neglect to market your business. There are a number of inexpensive ways to market your business, including throwing a grand opening party, having T-shirts printed, sending announcements to your local newspaper or using social media to spread the word.

When choosing your marketing methods, be aware of your target customer base and choose a method of marketing likely to appeal to that base.

4. Poor record keeping – Keeping track of receipts, check logs, time sheets and tax documentation may seem tedious, but it’s important to keeping track of the revenues and expenditures of your business, paying your bills on time, making sure you’re paid on time and complying with government rules. Having your books in disarray can result in late fees and unpaid bills and massive headaches at tax time.

There are a wide variety of software applications that can help you keep your books in good order, and many of them are inexpensive. It is highly advisable that you invest in accounting and management software, as it can save you a lot of time pouring over paperwork. You should also devise a filing system for keeping up with receipts and paper copies of bills and tax statements, as these may be necessary for completing your tax return and provide a valuable back-up to your electronic records.

5. Failing to meet sales goals – Not hitting your sales targets will leave you in a tough position as the revenue you expected to cover costs and create a profit doesn’t materialize. Insufficient sales revenues can cause you to fail to meet fixed costs, such as paying for inventory and making payroll.

If you’re not making sales goals, you may want to consider cutting prices. This could help business pick up, and while you still won’t be making as much as you planned on, you could earn sufficient revenue to meet your costs and ride out your slump until business rebounds. Price reductions are also a valuable word-of-mouth marketing tool, as a price cut can often bring in new customers attracted by your more competitive pricing.

6. Failing to control costs – Not having a firm grip on your business’ expenditures can quickly cause your business to lose profitability and even fold. You must keep a watchful eye on costs and look for ways to ensure that your revenues exceed them. This means keeping careful accounting records, spending the time to drill down and learn about costs that are unexpectedly high, and the discipline and persistence to enforce cost cutting efficiencies.

7. Bad location. If you pick the wrong location for your business, attracting customers will be an uphill battle. Also, if your business is located in an area not zoned for business, or where your specific home-based business isn’t allowed, you could face legal and regulatory hurdles. This is a pitfall that has to be avoided in the planning stages. Before settling on a location, inquire about the zoning and use regulations for the area where you plan to locate your business. Also consider the target customer base for your business, and whether your location will appeal to them. Be sure to ensure that your business has adequate water, sewer, electrical and telecommunications infrastructure to support your business, and also take the time to talk to community residents and get a sense of their feelings concerning a business locating in their neighborhood.

8. Hiring the wrong people. Getting the wrong set of employees can absolutely sink a business. In fact, the U.S. Department of Commerce estimates that nearly a third of all small business failures are caused by dishonest employees. When hiring employees, be sure to check references and conduct personal interviews to help make sure you weed out undesirable candidates.

Most of these mistakes can be avoided in the planning stages of your business, while the others can be dodged by due diligence in the course of your business. By thinking ahead and planning carefully, you can eliminate many of the variables that can negatively impact your business.

As prices rise, incomes stagnate and the pressure gets ever tighter on the middle class, more and more people are starting part-time small businesses to supplement their income and create an escape hatch in case their full-time job disappears.

A growing number of people are underemployed, meaning that they work at part-time jobs or have had their hours cut back at full-time jobs. According to the Bureau of Labor Statistics, nearly 8.8 million people are employed part-time because their hours have been cut back or because they’ve been unable to find full-time work.

Many of the underemployed are turning to part-time work outside their regular jobs to supplement their income and establish a safety net in case they join the nine percent of Americans who are unemployed. Many of these people are starting their own business ventures, contracting their services out online or from home businesses, becoming what’s known as moonpreneurs.

For example, many professionals who are underemployed are turning to freelance work Web sites such as Elance to utilize their skills to earn more income. Moonpreneuring via online work helps part-timers because it often lets them find work that they can fit into their schedules and can complete from the convenience of their own home.

According to a recent survey, nearly 36 percent of people who work online via Elance said they started doing it to supplement their income from their regular jobs.

When becoming a moonpreneur, it’s worthwhile to consider the following:

Start-up costs. Starting your own part-time business may have some costs, including membership fees, equipment costs, materials costs, etc. Make sure starting your own part-time business isn’t going to cost you more than it makes you.

Work/life balance. Be sure not to get so overloaded with work that your family life and social commitments suffer. Overwork will quickly impact the quality of work you can offer, and can be harmful to your health as well.

Building your business. Chances are the going is going to be slow to begin with. Be patient and build your business one satisfied customer at a time. As time goes by and you build up a good professional reputation and a stable of repeat clients, your business will expand.

Time management. Make sure not to overcommit to projects and take on more work than you can possibly complete. Set reasonable completion dates that are accurate for your clients. The best way to avoid overwork and handle your time optimally is to become an expert at planning, scheduling and using your time wisely.

Tax issues. Don’t forget that your other income is taxable too. Be sure to pay the appropriate FICA and income taxes on your moonpreneur income or you may get a visit from the IRS.

Don’t forget your day job. While it’s not providing the income that it used to, your day job is likely responsible for the majority of your income. Don’t let your performance at your regular job slip because of your afterhours work. Also be aware of any non-compete or other clauses that might land you in hot water if you’re caught moonlighting.

Moonpreneuring can help you supplement your income and provide a way to further your professional development. As time goes by and the business grows, you may even want to take it full time at some point. The key to successful moonpreneuring is planning and scheduling, finding an appropriate work/life/work balance and providing quality results to your clients.