Are you a professional writer? Do you have the potential to manage multiple projects and clientele? Why don't you start your own business? Strong growth in the content writing industry makes this an excellent time to break into the writing business.
Writing is a low-risk business to start. You don't have to invest hundreds of thousands of dollars into infrastructure. In fact, most professional writers work from home.
That said, a writing company is still a business. And like other small businesses, there's a lot that can go wrong. Whether your business is in copywriting, translation, social media, or SEO, becoming an entrepreneur requires a plan and a process.
So, where do you start?
What mistakes you should avoid when starting your entrepreneurial journey?
In this article I will discuss all the mistakes that your grandfather would tell you to avoid when starting a business.
Mistake 1: Not writing a business plan
The number one mistake entrepreneurs make is jumping in without a plan. While not every entrepreneur needs a formal business plan (although banks and investors will expect one), it's imperative to have a roadmap for your business.
A basic business plan:
- Projects income and expenses.
- Defines the business's target audience.
- Assesses the competition.
- Details a marketing plan.
Mistake 2: Making the business plan too rigid
The only thing worse than no business plan is a plan that's too rigid. The best business plans are living documents that define a business's objective, tactics, and key milestones while remaining adaptable to market conditions and customer feedback.
Mistake 3: Operating as a sole proprietorship
One critical question the business plan answers is what type of legal entity you'll operate as.
Businesses can be structured as:
- Sole proprietorships.
- Limited liability companies
- C corporations.
- S corporations.
Sole proprietorships are the simplest business structure. In fact, operating as a sole proprietor doesn't require forms or fees. However, this simplicity comes with a cost. Sole proprietors hold full financial responsibility for their business, including losses and debts. Accessing funding is also harder as a sole proprietor.
Registering as an LLC avoids these problems while retaining simplicity. Like sole proprietorships, LLCs have simple filing requirements. But unlike a sole proprietorship, forming an LLC in your state separates business and personal finances to protect entrepreneurs from business losses.
Mistake 4: Doing your own taxes
LLCs can pick to be taxed as partnerships, sole proprietorships, S corporations, or C corporations. Most single-member LLCs are treated as sole proprietorships for tax purposes. This requires filing both a personal tax return and a Schedule C as well as paying self-employment tax. Filing requirements for other tax entities are more complicated. No matter which tax classification you choose, it's worth hiring a CPA for tax filing, planning, and advice.
Mistake 5: Piercing the corporate veil
One big reason LLCs need a CPA is because of the 'corporate veil.' The corporate veil is the legal separation between personal and business assets. When a business owner 'pierces the corporate veil,' he or she fails to maintain the division between business financials and personal financials. This can result in personal assets being seized to satisfy business debts. Avoid piercing the corporate veil by creating business bank accounts, using a business debit or credit card for purchases, and establishing a system for paying yourself.
Mistake 6: Paying for office space
Entrepreneurs also need to track when they use personal items for business use. A home office is one common example. A home-based business is a huge money saver compared to the cost of commercial office space, which can surpass $30 per square foot in many metros. However, improperly claiming the home office deduction could trigger an IRS audit. If working from home, make sure your workspace meets the criteria for the home office deduction.
Mistake 7: Skimping on cybersecurity
Even at home, your business is vulnerable to cybersecurity threats. In fact, remote workers are a common target for cybercriminals due to weak network security.
Whether you're operating from an office building or at home, take these steps to protect your business:
- Secure wireless routers with passwords and unique SSIDs.
- Install firewalls on networks and devices.
- Run antivirus software on network devices.
- Learn about the common types of identity theft and scams.
- Use strong passwords and two-factor authentication.
- Install software updates and security patches on schedule.
- Regularly back up your data.
- Avoid using public WiFi networks.
Mistake 8: Doing everything yourself
Are these terms practically a foreign language to you? Not everyone is tech-savvy. If you're unfamiliar with cybersecurity basics, hire an expert to set up your home network. A cybersecurity consultant can secure your home office ASAP so you can get to work.
The same goes for other skills that aren't in your wheelhouse. Outsourcing jobs like bookkeeping, web development, e-commerce, research, and marketing reduces your workload so you can focus on the creative aspect of your writing business and building your client base.
Mistake 9: Neglecting work-life balance
Outsourcing to freelancers and agencies doesn't just help you get more done. It's also good for work-life balance. With less on your plate, it's easier to clock out at the end of the day and enjoy time with family and friends.
Entrepreneurs have to be intentional about work-life balance. There's always more to do when you own a business. However, working 24/7 isn't sustainable.
Use these tips to maintain balance while building a business:
- Use a calendar to track work and personal obligations, and avoid overscheduling.
- Dedicate specific times to answering texts, phone calls, and emails.
- Delegate to employees, freelancers, or agencies, and avoid micromanaging.
- Invest in software to streamline and automate business tasks.
- Take breaks during the workday, but avoid procrastination.
- Turn off work devices at the day end. Avoid being 'on the clock' 24/7.
Mistake 10: Neglecting your work
On the other side are entrepreneurs who struggle to stay on-task. Discipline is key for entrepreneurs, but it doesn't always come naturally.
Being disciplined starts with building good habits. Use to-do lists to prioritize and schedule your day, break goals down into measurable steps, and avoid distractions that derail your progress. Take time to recharge, but keep your eye on the prize too.
Mistake 11: Failing to plan for growth
Speaking of goals: Most entrepreneurs want to do more than starting a business — they want to build a business. As you create the systems and processes that let your business succeed, ask yourself what comes next. Do you want to chase bigger contracts? Hire staff? Add new services or expand into new sectors?
Writing businesses have a few options for how to grow. However, they all require money and resources. Before scaling, adjust your budget, secure financing, and expand marketing to grow your customer base.
Established businesses have better access to financing compared to startups.
Business loans include:
- Bank loans, including loans guaranteed by the Small Business Administration.
- Business lines of credit.
- Equipment loans.
- Invoice financing.
- Merchant cash advances.
Getting a business loan isn't as simple as walking into a bank. Borrowers need financial statements, tax returns, and other documents to qualify for a loan. Lenders may also require collateral.
Mistake 12: Scaling your business too quickly
Business loans come with loan payments. If your business takes on a debt too soon, you could struggle to pay off debt and expand your business simultaneously.
It's normal to get excited about a new business. However, avoid scaling up too soon. Rapid growth can leave bank accounts depleted, employees stressed, and customers unhappy if you're not careful. In fact, premature growth is a big reason businesses fail.
Aim for smart growth instead of fast growth when building your business. When you emphasize quality over quantity, you ensure your writing business's good reputation grows alongside its market share.
Mistake 13: Being afraid to fail
There are no avoiding mistakes when starting a business. You'll overspend, make bad hires, and even disappoint a client or two. But while small mistakes are inevitable when building a business, these tips will help you prevent major missteps that put your company's future at stake.
Learn from your mistakes! It's not uncommon for small businesses to fail. According to the U.S. Bureau of Labor Statistics, nearly half of all new businesses fail in the first five years. However, many entrepreneurs go on to start new businesses. Treat failures as learning opportunities, and your next business venture will emerge even stronger.
Starting a writing business — or any business will be daunting. But knowing the pitfalls to avoid makes the path to entrepreneurial success a lot clearer, and you are better prepared for it.
Are you preparing to launch a business? We will show you how great content can help your business succeed, whether you're just starting out or planning the next stage of your company's growth with content marketing, contact us today!.