Executive Education

Capital-Raising Mistakes to Avoid as You Grow Your Business

When you’re in the early stages of growing your business, you have a lot on your plate. It’s important to be able to fund expansion, and oftentimes, CEOs and business owners make crucial mistakes in this delicate phase. Avoid making these common mistakes in the first year of your business.

Paying attention to revenue, but not profit

Perhaps one of the biggest mistakes that new business owners make is paying close attention to business revenue, but not enough attention to the bottom line: profits. While it’s important to see your revenue line trend up over time, if you’re spending extraneous costs on advertising, labor, operations, or anything else, you’re going to end up shooting yourself in the foot over the long term.

To avoid this mistake, get your employees and executives in the habit of reporting on profits over gross revenue. In addition, perform frequent cost-benefit analyses to make sure you’re not overspending in areas that aren’t paying off sufficiently. Especially in the first few years of your business, you need to be incredibility diligent about financial reporting. Don’t get comfortable and challenge yourself and your employees to always be finding ways to boost profits.

Making risky investments 

Another big mistake that new business owners can easily make in the first few years of their business is making risky investments. While capital is crucial in the early days of your business, and you will likely need loans or investments when you first start out to grow and expand, be cautious not to fall for investments that seem to good to be true. Don’t be blinded by large dollar signs- do your due diligence to research potential investments and loans. Set a fixed payoff rate, or clearly outline payoff details if it will fall within a certain time period.

Investing can be a great way to slowly grow your businesses’ assets. And with the rise of popular investing options, such as bitcoin, there are more options than ever to invest your money. If you do want to invest in bitcoin, be sure you have done your research and have a strategy. Whether you are going to Buy Bitcoin in Canada, the United States, or anywhere else, make sure you investigate specific parameters and limitations. This will prevent you from making a mistake down the road.

Hiring employees carelessly

When your company starts to grow, you will need to staff up to meet requirements for workload. You may feel the pressure to hire, and hire quickly, but it’s far more important to make the right hire than the fastest one.

In addition, once you hire someone, it takes time to train them and familiarize them with your company and processes. If you make a mistake and hire an employee that ends up not working out, all that time will have been wasted. Spend a little more time up front in the hiring process to make sure you’re hiring the right people, and you’ll save your company lots of time, money and energy down the road.


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Aimee Lee Webber
Editorial Aide/Reporter at The CEOWORLD magazine. Nationally Syndicated Advice Columnist. Generally prefer dogs to humans. Loves dragons. New Yorker.