In this post I will speak about typical mistakes that you, as a future business owner can make. These mistakes are very common among new business founders. If you take these points into consideration, you will increase your chances of success.

The first mistake is starting your own business without having adequate experience in the relevant field. It is imperative that you gain experience in the field where your business will operate. If you plan to start a software development business, it is important that you work in the industry a year or two. Even if you won't become a professional programmer, having experience in software engineering will help you. The same is true for other industries as well. Under experience I imply not only technical expertise, but knowing key players in the industry, having contacts with key people and so on, well you get the idea.

The second mistake that a business founder can make is to appoint himself/herself as a CEO of the company. Usually new businesses are started by people who are professionals in certain fields. For example, a programmer after working 5 years for a software developer company quits his/her job to start own business. Experience shows that such new businesses have slim chances of surviving and becoming successful. Why is it so? Simply, because being a boss requires additional skills along with the domain knowledge and expertise. Unfortunately, most of the newly founded small businesses does not have enough financial resources to hire professional managers and thus the founders are becoming de facto managers. This point is so important that I'm obliged to bring a an example.

Let's take Google. It is a software giant, a multi-billionaire company, dominant player in the industry. The company was started in a campus room. One of the factors why Googles has become so successful is that its two young founders, Sergey Brin and Larry Page hired a professional manager as soon as the company could afford it. The same can be said about Apple. I won't take much of your time by bringing additional examples, there are quite many, both today and in the past.

The third mistake that you can make is to start your own business in order to avoid hard work. Some people are so bored with their jobs that in order to avoid it start new businesses. Such endeavours are usually doomed for failure. If you think that running your own business will save you form working hard, pardon, but you are deeply mistaken. George Eastman, the founder of Kodak would spend nights experimenting prior to founding the company. Successful entrepreneurs work almost 24 hours a day.

The fourth mistake is starting your own business when you are not ready to sacrifice. Spending less time with your family, cutting down on personal expenses, taking risks, being overstressed are a number of things that you may face. If you are not ready to cope with those things, you'd better not start your own business at all.

The fifth mistake is being very optimistic about future. Being too optimistic I would say is dangerous when you run your own business.

The sixths mistake is starting a business without a sound and well thought out business plan. Equally terrible mistake is having a business plan which is put on the shelf covered with an inch thick dust. Business plans are to be followed, reviewed, reworked but not put on the shelves.

Of course, there are many other pitfalls and difficulties, however I've tried to direct your attention to the most important mistakes. Hopefully, these introductory topics are giving you a good idea whether to start your own business or not.

Have you noticed that some businesses grow extremely fast while other businesses don't grow at all? Yet another businesses grow slowly but steadily.

For example, let's take Google. The company is celebrating its 9th birthday this year. Google has demonstrated phenomenal growth, hence their owners are one of the quickest guys to become billionaires.

Now let's look at pharmaceutic companies. Almost none of the well established pharmaceutic companies experiences rapid growth, yet almost all pharmaceutic companies grow slowly but steadily.

Finally, let's look at a local grocery store. It has a limited growth potential. Even if it is a profitable business from year to year, still it has a very limited growth potential.

You may object that Google is a big corporation and the local grocery store is a home-based business run by a family. Well, you are right if you compare today's Google to the grocery store. But please notice that 9 years ago Google was a small company as well.

We can conclude that a company size does not have much to do with its growth potential. However, the nature of the business does. This is such an important point, let me repeat it. The nature of the business is one of the factors that determines the growth potential.

Generally, businesses introducing innovative or revolutionary products and services have the fastest growth potential. However, at the same time such companies have the greatest risks. Companies offering well established products and services are usually associated with low risks but at the same time low growth potential.

There are many factors that affect growth potential. Generally, the industry or the segment where the company operates determines the growth potential. As a rule, when a particular industry experiences fast growth, so do the companies involved in that industry.

There are several other factors that determine growth potential, however the nature of the business and the industry are one of the most important factors. We will get back to the topic of growth in the upcoming posts as well.

By the way, the next post will be very interesting. In the next post I will speak about pitfalls that expect you and the most common mistakes that business owners make. So stay tuned, and don't forget to subscribe to the RSS feed.

In the previous post I have tried to highlight some (but unfortunately not all) of the difficulties associated with running your own business. It's time to move to the bright side of running your own business.

First, if your business becomes successful and financially healthy, it may generate considerably more income to you than what you would get by working for someone else.

Second, even if you had a high salary job, you would still be limited in your annual income. This is not true when you run your own business. If your business grows, so does your fortune. Theoretically, many businesses don't have much growth limits. For example, if you have $500,000 per year, your income will be half a million no matter what you do. However, if your business makes half a million in net profits and you expand it and start making quarter a million more, then you earn $750,000 per year.

Third, you are your own boss. Unfortunately, many people, especially young and inexperienced business owners see this advantage as the most attractive. Unfortunately this is not true in reality. You should never abuse this privilege.

Fourth, if you establish your business with long term objectives (i.e. not a business with quick exit strategy) then every minute spent by you working you work on yourself. Thus you make yourself richer, not your employer.

Fifth, you have more control of your life. As long as your business is doing fine, you don't risk losing your job whereas a slight reorganization in an employer might have left you jobless.

Sixth and the most important thing about running your own business is that if you do right things and do things right, your own business will give you a perfect chance for self-realization because only in your own business will you have full creative freedom.

Finally, I would like to mention that neither this list nor the list from the previous post, is or can be complete. Rather, I've tried to highlight the most important (at least from my experience) negative and positive aspects of running your own business.

Running your own business is such a tempting thing that sometimes I think at some point in life everybody must try it. I'm 28 and I've been running my own business for over 8 years. I started working when I was 18 and the very first two years was the time that I worked for someone else.

Starting your own business when you are a teenager and your experience is almost zero is a tough thing. The same is true when you are 55, experienced but lacking the energy that you would have at 18.

If I had a possibility to go ten years back in my life, I would follow the same track and would start and run my own business. The reward outweighs all difficulties, pressure and risks. We'll talk more about this below.

There is a prevailing misunderstanding among people that running your own business is always the best thing. Unfortunately, in life, nothing has only positive sides and running a business is no exception. Let me quickly mention a couple of disadvantages of running your own business.

First, your personal income depends on the success of your business. With an employer you have a guaranteed income. As long as you are not fired from your job, you get your monthly salary.

Second, you must take care of your superannuation. When you work for a company, your employer is taking care of your superannuation. The same is true for a paid leave or a sick leave. For example, according to contracts with my employees, they are entitled to a 4 week paid leave.

Third, at 6 PM you leave your work, right? Even if you have a lot of work and have to stay longer at the office, at some point you will leave your work. Unfortunately, this is not the case with your own business. When you are running your own business, it's always with you, at 3:00 PM, at 4:00AM or when you are dreaming about Ferrari 430.

Fourth, as a business owner you are under a heavy pressure. If you grow your business, at some point you will have to hire employees. Those people's and their families' well being is heavily dependent on the success of your business. If your business runs into difficulties, you will have problems paying salaries and this will put serious pressure on you. In a worse case the pressure may drive you to a nervous breakdown.

Fifth, in many cases you will have to compete against companies that have more financial power than you do. Your financial power limits your abilities to spend enough on marketing, research and development, operations and thus puts you in a less competitive position.

Sixths, mistakes for a small business owner might be fatal whereas a large corporation may easily survive a row of such mistakes.

There are many other difficulties and disadvantages associated with running your own business. However, I've tried to highlight the most important and critical difficulties. Hopefully, you are not scared. In the next post I will speak about positive aspects of running your own business.

Welcome to our Business Blog, a new member of the Blogvasion Family of blogs. As you may have already understood, main focus of this blog will be business. I will cover such topics as entrepreneurship, business planning, management, marketing, finances, negotiating, game theory and strategic thinking. Both theoretic and practical issues will be addressed. Most of the blog posts will be based on real-world experience. Here we won't talk about Mr X. or ABC Corp., rather all of the examples and case studies will be based on real people and real companies.

Target audience for this blog are people who would like to start their own small business, existing entrepreneurs, managers as well as students of business schools. In order not to make the blog too dry, from time to time we will include interesting business news and funny stuff. It is my plan to publish a new article in every two days. So, stay tuned and don't forget to subscribe to this blogs' RSS feed.