Starting a business comes with a steep learning curve, especially when it comes to pricing, cash flow, legal requirements, hiring, and delegation. Most owners learn these skills through experience, trial and error, and a few hard lessons.
We asked 173 small business owners what they wish they had known when they first started. Here's what they told us.
1. Get professional help early
Nearly a quarter of respondents mentioned professional help, the most common advice in the survey. Their message was clear: bring in the right experts early, before preventable mistakes become expensive problems.
A business attorney can be a good place to start. Leases, vendor contracts, and other agreements are usually written in favor of whoever drafted them. Having a lawyer review them before you sign can help you spot risks. If you're starting the business with partners, a written agreement that spells out each person's role, responsibilities, and expectations can help prevent disagreements later.
It's also smart to talk with a CPA early, especially about taxes and expense tracking. Setting these up correctly from the start can help you avoid surprise penalties and make sure you claim every deduction you're entitled to. As one owner put it, "Find a great CPA to help understand the best way to file taxes and best way to set up expense tracking so tax prep is easier."
A bookkeeper or accountant can keep your financial records accurate and up to date, so year-end is less stressful. A compliance partner, whether a service or an individual professional, can keep track of annual filings, registered agent requirements, and state rules so nothing gets missed.
One owner summed up this advice well: "Be sure that you know exactly what is involved to set up a business properly. Invest in a lawyer and an accountant. They will help you avoid costly mistakes." Another added: "Get a skilled Admin person in Finance, Tax, HR. One person should be able to do all in the early days or years of a new company."
2. Do your research and due diligence
Research was the second most common piece of advice. Phrases like "do your homework" and "do your research" came up again and again. That research goes beyond understanding your market. It also means getting a clear picture of what it really takes to start and run a business before you commit.
Many owners stressed the importance of making sure there's real demand for what you plan to sell. Several said it's essential to confirm that customers exist before putting in a lot of time and money. Being excited about an idea, they pointed out, doesn't prove that people will pay for it.
Respondents also recommended looking into every part of the business, not just the product or service itself. Learning what's involved in legal and compliance, sales and marketing, operations and technology, and people and leadership gives you a more realistic sense of the work ahead. One owner put it plainly: "Make sure you research all aspects of the business. It is the best way to be as prepared as possible."
No matter where you do your research, talking to real people still counts. As one respondent advised, "Consult with real people. Do not rely solely on AI."
3. Pick the right business structure (and know what it means for you)
Choosing a business structure is one of the most important decisions you'll make early on. It affects your personal liability, your taxes, how much paperwork you'll deal with, and how easily you can bring in investors or partners later. Several respondents kept their advice short: "Choose a proper structure" and "Form the proper business entity."
Taxes are usually the first thing new owners consider when comparing options, but they're only part of the equation. The type of business you run, your plans for growth, and how ownership might change over time can matter just as much. These factors are easy to overlook when you're focused on getting up and running.
Small businesses often choose one of three structures. A sole proprietorship is the simplest, but it offers no liability protection. Legally, you and the business are the same, so your personal assets are at risk if the business owes money or gets sued. An LLC keeps your personal assets separate from the business and has fewer formal requirements than a corporation, which is why so many small businesses choose it. A corporation issues shares that can be bought and sold, making it easier to bring in investors or offer stock options to employees as the business grows.
The best structure depends on where your business is now and where you want it to go. As one respondent pointed out, it helps to understand the difference between an LLC and an S corp, and to know when it might make sense to change your status as the business grows. (An S corp isn't a separate type of entity. It's a tax classification that an eligible LLC or corporation can elect by filing with the IRS.)
For more information, see Comparing different types of company structures.
4. Plan carefully, but stay flexible
Some owners were big believers in planning: "Plan, plan, plan." Others stressed the need to adapt once things got underway. Both are right. You need a plan, but you also need to be ready to change it.
A business plan will not predict the future, but it will test your assumptions before they become costly mistakes. Mapping expected costs, revenue timing, and day-to-day operations can reveal problems that are easier to fix before opening. Several respondents recommended a three-to-five-year planning window, which is long enough to be useful without becoming guesswork.
At the same time, no plan holds up perfectly once things get underway. Markets change, competitors react, and outside events can throw off even the most careful plans, as many owners found out during the pandemic. One respondent put it this way: "No matter how much you plan, something will come up. Be flexible and adaptable." Another summed it up more simply: "Just keep moving forward and if you have to, just pivot."
The most useful way to think about a business plan may be as a starting point rather than a contract. Put real effort into it, check back on it often, and be willing to adjust when circumstances change.
For more information, see Key elements of a business plan.
5. Get your finances and cash flow in order
The advice from experienced owners in this area goes beyond "save more money." One of the first questions worth answering honestly is how long you can sustain yourself before the business generates enough revenue to pay you. As one respondent put it, "Confirm your budget with realistic expectations of how long you will be able to support already committed expenses like utilities, food, and benefits until you have made enough money from sales to pay yourself a salary." That timeline is often longer than expected.
Cash reserves were a recurring theme. Slow periods, unexpected costs, and delayed revenue are common in the beginning. The owners who get through these early years usually saved more than they thought they would need. "Be well capitalized," one respondent advised. "Rainy days always come around."
Several respondents also emphasized the importance of cash flow over profitability, particularly in the initial stages. A business can be profitable on paper and still run into serious trouble if cash runs out before receivables come in. "Focus on cash flow over everything else," one owner said plainly.
6. Stay on top of compliance
Many new owners were surprised by how much compliance work there is. Getting your business up and running is just the beginning. Every business needs to keep its licenses and permits current, and LLCs and corporations also have ongoing obligations like filing annual reports and maintaining a registered agent. Other requirements vary depending on your entity type and where you operate. As one respondent put it, "Be aware of the annual filings required from State and Federal agencies." If you have employees, there are additional government reporting requirements, so it's worth learning what those involve too.
Missed or late filings can lead to penalties, fines, or losing good standing with the state. These problems can be much easier to prevent than to fix. One respondent was blunt about the time it takes: "Don't underestimate the massive amount of time required for administrative and compliance filings. Take what you expect to spend in time and triple it."
For a number of owners, the bigger surprise was that no one had told them about these requirements. One owner didn't learn about them until years after starting the business: "No one told me about compliance and registered agents. [I didn’t] realize there was an old address with the state." Keep in mind that requirements differ by state and entity type, so what applies to one business may not apply to yours.
For more information, see What is an annual report?
7. Know when to move fast and when to slow down
Having a plan is one thing. Deciding how quickly to act on it is another. Owners disagreed on whether to move fast or take it slow. Some said, "Just do it. Don't overthink things," and "Start doing and figure the rest out later." Others advised, "Slow down and take your time so that you do it all right the first time." Both sides have a point, and the best approach often depends on the type of business and what stage the owner is in.
The argument for moving quickly is simple. Overthinking can hold you back, and waiting for the perfect moment or every last piece of information can mean missed chances and stalled progress. "Sometimes overthinking things slows you down," one respondent said. "Just start small and adjust from there."
The argument for slowing down is just as reasonable, especially for legal and structural decisions. Choices about how the business is formed, its entity type, operating agreements, and compliance setup are much harder and more expensive to change than day-to-day decisions. Getting them right up front costs less than fixing them later. As one owner put it, "Setting things up correctly the first time saves time and money on the backend."
In the end, the question isn't really whether to move fast or slow. It's knowing which decisions can be easily changed later and which ones can't. Many choices can be tested, adjusted, or undone as you learn, and those are often worth making quickly. Others are harder to reverse and deserve more time and care.
8. Get organized and keep good records from day one
Good financial habits are easier to build early on than to repair later. Waiting until tax time or a problem arises can leave owners sorting through months of missing or disorganized records, adding time, stress, and expense.
The first step is straightforward. Track all income and expenses starting with your very first transaction, rather than waiting until the business feels established. Mileage for business travel is easy to forget, but it can add up to a meaningful deduction at tax time. Reconciling your accounts on a regular schedule helps you catch small errors before they turn into big ones.
It also helps to ask your accountant what records they need. A system that works for you may not give your CPA what they need to file accurately and efficiently. One respondent summed up the core habit: "Make sure you keep good records of all income and expenses including mileage." Another put it simply: "Do your books, understand the cash flow, be frugal."
Good records do more than make tax season easier. They give you accurate financial statements, a clear view of how the business is doing, and the information you need to make smart decisions as you grow.
9. Learn from people who have done it before
A mentor or fellow business owner offers something different from a lawyer or accountant. They can share firsthand experience with a similar business, market, or challenge.
Several respondents said mentorship was one of the most helpful resources they had as new owners. "Find a mentor. That helped me a lot!" one owner said. Another suggested a place to start: "Talk to the SBA local office and get a mentor." Through its local offices and partner organizations, the SBA offers free mentoring and other support for new small business owners, and many first-time owners don't realize it's available.
Other business owners can be just as helpful. People who have recently built a similar business can give you a more honest and realistic sense of what to expect than books, blogs, or online searches. "Ask questions to other small business owners of what to expect the first year or two," one respondent advised. Another said, "Speak with someone who has already done it with a similar business."
No amount of research can prepare you for every question that comes up in the first year or two. Having someone who has been through it and is willing to share what they learned can make a real difference.
10. Bring patience, passion, and persistence
Research, planning, and professional advice can only take you so far. The first two years will still bring surprises, and the owners who make it through tend to share a few qualities.
Patience came up again and again. As one respondent said, "Starting a business takes patience. Be prepared to be constantly marketing and receive little or no revenue while so doing." Revenue often comes in more slowly than expected, customers take time to find, and the market rarely moves as fast as new owners hope. Being patient with the process, with your customers, and with yourself is a practical need, not just a nice idea. It helps you avoid burnout and rushed decisions in the early stages.
Passion matters for a similar reason. Running a business comes with plenty of administrative, financial, and compliance work, all on top of the work you set out to do. As one respondent put it, "Be sure it is something you want, but also like to do." Truly enjoying the work is what keeps you going through the tasks that have little to do with why you started.
Persistence ties it all together. “Be thoughtful and patient, and stubbornly persistent,” one owner advised. Another emphasized the long view: “Accept the early short-term risks for long-term success and happiness.” Those early years often require more time, money, and energy than expected, and a willingness to “wear many hats and learn about many aspects of business you never thought you'd need to know.”
Fear of failure is normal, and most new owners feel it. Those who keep going learn to see setbacks as lessons rather than final judgments. As one owner put it: "Don't be paralyzed by the fear of failure."
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