The following list is derived from my experience. Based on my actions and results I retired from corporate America at the age of 28. I’ve been involved in several successful businesses and many unsuccessful ones too.

#1 -  Never let your expenses exceed your sales.  Yeah, I know that’s easy to say, because you say “Jeez, that makes perfect sense, if my expenses never exceed my sales then quite honestly I’m always going to have positive revenue.  I’m always going to be in the profit. Wow. That’s fundamentally smart. But c’mon Bert, it doesn’t work that way in the world.  Why? When we start out we don’t have any sales yet, and so our expenses have to exceed our sales on day one.” And you’re correct.  That’s true, so I want you to have a concept, a goal or even a burning desire. That you will make those days the fewest number of days absolutely possible that your expenses are exceeding your sales.

#2 -   Failing to collect the money or the receivables. Question - Should you really be extending credit to people? I don’t care what business you're in: retail, wholesale, hospitality, legal, or whatever. Selling is not about carrying receivables. Don’t extend credit, get paid now! Look, having fewer customers that pay you 100% is way better than having more customers where some of them don't pay. More cash, less stress - you don’t have to be really smart to do the math.
 
# 3 -  Failing to take care of your employees. People say the customer is number 1 – right? Maybe not. Well, who is taking care of your customers? Your employees handle quality and service and delivery? If you haven’t taken care of your employees, they’re probably not going to take care of your customers very well. It’s just that simple. It’s goes without saying that if you do take care of your employees, they will take care of your customers.
 
#4- Failing to take care of your customers. Real simple concept here: the easiest customer is to keep your existing customers. There is usually more profit in repeat customers than in new customers. A happy customer is a good customer; a good customer refers more customers. Take care of your customers and they will take care of you.
 
#5 - Underestimating your competition. We can think of our competitors as dim-witted or incompetent. Remember this: our battle isn’t against our competitors. It’s for the customer. We don’t win by doing damage to the competitor.  We’re in a battle for the customer. So quit thinking about the competitor and start thinking about your competitor’s customers.
 
#6 Inadequate capital - Now you've started a business with no money but, you quickly come to realize that you do need money to operate. You do need capital to grow the company and get to the next level. Here are 2 rules you should remember about capital. (And, just in case you're not clear, capital is the money we need to fund the organization, to buy the inventory, to hire employees, to do all those things that we’re going to need to do).

Your expenses are going to be higher than you anticipated and

Your revenue is going to be lower than you anticipated.

Those two statements are true in 99.99% of every single business that has ever started. It happens almost all the time because we are optimistic. If we weren’t optimistic, we wouldn’t have started a business. We over-projected what our revenues will be. What I’m telling you as a practical, experienced businessman  is lower that number! Now if you beat it, if you excel… wonderful! Find a place to spend it. But if you have been conservative in your projection, then you might be safe.
 
#7  Underestimate the length of time to break even. The break even is a magic moment in the making of a business and if you don’t understand let me try to explain the concept to you. Break even is that magic point when you quit putting money into a company and the company is finally sufficient enough that it starts to pay for itself or is finally starts to pay you.
 
# 8 Focusing on profits instead of on cash flow. Often when entrepreneurs first start out, they focus on profits instead of on cash flow. I know this is going to sound sacrilidges to some people who say, "Aren’t we supposed to be all about the profits?" Absolutely! And, we all want to get there as fast as we possibly can! But, before we get there we have to make sure something else happens, first, and that is that we always have positive cash flow so we have enough money to pay the rent on time, to pay our employees, to buy more supplies, to do more marketing, etc.  This is really crucial.
You actually can be unprofitable, actually losing a little bit of money, but still have positive cash flow. This may feel uncomofrtable but if you have to pick between the two, pick cash flow when you’re first starting your business. Profits will follow the cash flow; I guarantee it.

 
#9 Over estimating the size of your market. Entrepreneurs are optimists and we tend to have this attitude that everyone is going to want to buy what we have immediately. Get over it. It’s not going to happen. So what you need to be able to do is think about Bottom Up Marketing. It isn’t about how many potential customers or how many people are out there, it’s about what you can you really do.
Bottom Up Marketing looks at your capacity. So if you have 1 employee, 3 employees, 7 employees, that’s all you can handle. It doesn’t matter how many people might want your widget. You can’t handle it! So think coolly about the real size of your market and don’t ever estimate it because you can’t handle it right now. You only need enough market to handle the capacity you presently have, and if you can do that efficiently you will be profitable, and if you're profitable you’ll be successful and if you're successful you can grow the company again, and again, and again. Do a little research on “Bottom Up Marketing” and you will have a better understanding of the concept
 
#10 No Advertising/Marketing plan. So how are you going to drive your sales through advertising or through sales people. You need to develop your marketing plan, you need to have enough capital to drive sales. I’ve seen too many times were entrepreneurs will invest all this money in equipment or to get the doors open only to discover they have no way to adequately drive sales.
 
#10.5 - Exit strategy. At one point, P.T. Barnum noticed that people were lingering too long at his exhibits. He posted signs indicating, “This Way to the Egress“. Not knowing that “Egress” was another word for “Exit”, people followed the signs to what they assumed was a fascinating exhibit…and ended up outside. So what am I talking about?  We should start a business that we can create and build  and eventually sell, transfer, dispose of, or hand off to someone else.  
Remember . . . You Were Created to Succeed!
Bert
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