Common Mistakes for New EntrepreneursSýnishorn

Common Mistakes for New Entrepreneurs: Part I

A new entrepreneur I recently coached reminded me of several mistakes that new business owners can sometimes make. One of the most common is that many fail to realize the impact of taxes on a small business.

When you collect money from customers, it’s easy to assume it’s all your money. But it’s not all yours! The biggest mistake for many is to not earmark monies for taxes. 

For every dollar in profit, you owe the IRS income tax and 15.3% for self-employment tax. The IRS penalties and interest for nonpayment have put many people out of business. 

Proverbs 4:7 teaches, "The beginning of wisdom is: Acquire wisdom; and with all your acquiring, get understanding."

Before spending money that isn’t yours, spare yourself penalties and pain. Seek wisdom from people knowledgeable on taxes.

Questions for Reflection:   

• Why do you think many new entrepreneurs don’t “acquire wisdom” fully before launching a new business?     
• Do you know of a new entrepreneur who could use your mentorship? Are you willing to give of your time and talent to help him or her “acquire wisdom?” 
• Why are lessons learned the hard way often the least likely to be forgotten?