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Life Lessons: Mistakes to avoid when starting a business

By Nancy Werteen, Anchor / Reporter, NWerteen@wfmz.com
Published On: Oct 25 2013 04:00:00 AM CDT

Here are some mistakes you can avoid if you plan to open your own business.

Nancy Hans is in constant motion when she churns out homemade goodies using only organic ingredients.

This former systems analyst combined a love of cooking with her quest to provide healthy treats for her two dogs.

After two years, the "Woof-Stop Barkery," is now breaking even financially.

"Everyone these days is, thankfully getting more educated on food labeling," Hans says.

She's already beaten the "new business odds." Twenty-five percent of all startups are out of business after one year and 54 percent are gone after five.

Rebecca Harris knows that harsh reality all too well. She calls herself a serial entrepreneur. She's been a no-cholesterol cookie maker, and developed the "Nettle Not"- a huge net that protects ocean swimmers from jellyfish. Both ventures went by the wayside.

"I did not write business plans for those companies," says Harris, who now works at Chatham University's Center for Women's Entrepreneurship.

Experts say lacking a clear focus is one of the top reasons new businesses fail.

Also, don't under estimate your startup costs. Calculate how much you'll need to keep running for three years and then add 50 percent to it.

Harris advises women to do only what you absolutely love.

That was finally the key to her success with a publishing company she founded 20 years ago. She started the business in her basement and sold it for a large profit after hitting the $1 million mark.

Another tip from the experts is to not hire close friends; 75 percent of the time, it doesn't work out.

And don't underestimate the time commitment, it can lead to burnout.

Another piece of advice: don't fear failure.

In fact, be prepared for it, as you'll have many failures along with your one big success.