What are common mistakes that are made when setting up a company?
Many people set up their own company to put their ideas into practice and to be their own boss. In doing so, they may have to overcome major barriers to market entry, such as certain capital or regulatory requirements.
A study by VZ shows that many people founding a company for the first time underestimate what it takes to work for themselves: their business plans or expected customer acquisition might be too optimistic, or their planned earnings might turn out to be lower than anticipated.
In 25% of company closures, liability problems are a contributing factor. Many new company founders are not careful enough about clarifying in advance the best legal form for their company over the long term. And more than anything, many underestimate how many administrative tasks have to be performed in addition to actual business operations.