You start your business with a boatload of enthusiasm.
What you may not have is a wealth of accounting or financial knowledge — the ins and outs of tax law, cash flow management and insurance.
Just over 400,000 startups opened their doors in 2015, according to the Small Business Association. The good news: That's more than the number of small companies that folded the same year (396,000).
Every startup needs some money know-how. These skills probably aren't your core business, yet they're essential. Any one of these could trip you up seriously.
Temper your expectations, says Nick Loper, founder of Side Hustle Nation in Livermore, California.
"Market conditions can change, algorithms can update, clients can leave, or key employees could jump ship," Loper said. "Earning money today doesn't guarantee earning money tomorrow."
You may be eager to make business decisions that could give you some capital, but always make sure you thoroughly comprehend the ramifications.
To that point, never take out a loan if you do not understand the repayment terms, explained Christine Rico, founder and consulting chief financial officer of CFO on Speed Dial. Rico's company helps owners with accounting and financial strategies.
You'll need to do your homework and find your mentors. "So many business owners are afraid of the answers or looking foolish, they don't ask the right people the right questions," said Tara Johnson, who started a bookkeeping business as a side hustle.
It's an uncertain world.
"To combat the inevitable ups and downs, think of what you can do to set your business up for recurring revenue," Loper said.
"He had the idea to begin filming himself doing the repairs and putting those videos up on YouTube," Loper said. "Eventually he started to sell full-engine rebuild videos online."
If you're not familiar already and while it may sounds obvious, experts suggest you get to know the basics of accounting. Read a book, find a website, take a basic accounting course.
Unless you track the numbers, you don't know how much you are actually bringing in, says Josh Bauerle, a CPA in Willard, Ohio.
This is even more true when it's a side hustle, not a full-time enterprise.
"You need to look at the income that's going in, and even more important, the expenses going out," said Bauerle, who is also co-founder of The Prestige Journal, which provides accounting services for online companies.
Both are needed for a complete picture, one the IRS definitely wants to see.
Another reason to know your numbers, says Johnson, is that you'll need them to set prices. "If you don't know your risk and exposure, how do you mitigate it?" she said.
"We stress the importance of cash," Bauerle said.
Businesses need a good cash management system to make sure there's always enough money to pay the bills. If you run out of money when an inventory bill comes due, you could wind up shutting down, Bauerle says.
Rico once worked with a small cookie company that was a victim of its own success. When their demand soared one holiday season, they had to shut down. "They couldn't afford to play their suppliers for more supplies," Rico said. "It was a cash flow management problem, and they went under. Their demand exceeded their capacity."
Starting with small goals almost guarantees you'll wind up with different information than if your initial ambitions were larger, Rico says.
"If your mental model is [just what you can do right now] and you don't have a picture of where you're going, it's a much slower process," Rico said. "You don't do the math on what it takes to scale, and how much cash you need to grow."
Rico says it might seem counterintuitive, but you can actually burn out fast when you hamstring your own potential growth.
Consider the difference between continuing to bake and sell cookies at a local market and trying to make it into a business where you employ 10 people to do the baking for you. "Look at incremental growth from where you are," Rico said.
Taxes in general are confusing, Bauerle says. E-commerce sellers, for instance, commonly think inventory they've purchased can be a tax write-off. "They find out it's not a deduction until they sell it," Bauerle said, "and they may have $10,000 of inventory."
People often think quarterly taxes means they'll need to file a tax return four times a year. "You just have to pay the estimated taxes," Bauerle said.
Because of the IRS safe harbor, the IRS bases your estimated taxes on whatever you owed the year before. "As long as you pay 100% or 110% of what you paid the previous year you'll be OK," Bauerle said.
In the first year of your business, you do not need to pay estimated taxes, Bauerle says, but it's a very good idea to set them aside for the next year.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.