From Steve Pavlina's increasingly-impressive blog, a post all of Us should read. Here it is in excerpted form, but the whole article has much more gold to be mined.
10 Stupid Mistakes Made by the Newly Self-Employed
1. Selling to the wrong people.
...Selling to the wrong people includes trying to sell to everyone...Feel free to say no to customers that are more trouble than they’re worth...Don’t network with random people just because you think you’re supposed to network...Learn to say no to the weak opportunities so you have the capacity to say yes to the golden opportunities.
2. Spending too much money.
Until you have a steady cashflow coming in, don’t spend your precious start-up cash unless it’s absolutely necessary...I soon learned that every dollar invested in the business was another dollar that eventually had to be recouped from sales...Your business should put cash into your pocket, so before you “invest” money into it, be clear on how you’re going to pull that cash back out again.
3. Spending too little money.
Don’t let frugality get in the way of efficiency. Take advantage of skilled contractors who can do certain tasks more efficiently than you can. Buy decent equipment when it’s clear you’ll get your money’s worth.
It takes time to develop the wisdom to know when you’re being too tight or too loose with your cash, so if you’re just starting out, get a second opinion...If you can’t justify the expenditure to someone you respect, it’s probably a mistake. On the other hand, there are situations where it’s hard to justify not spending the cash.
4. Putting on a fake front.
There’s nothing wrong with a one-person business, especially today...It’s perfectly OK to refer to your business as an "I" when you’re the only one working in it...Promoting yourself as an "I" may even be an advantage today, since people will know the buck stops with you, and if you make a promise, you’re the one who will carry it out...If you’re so desperate for business that you need to lie, you shouldn’t be starting your own business. If you can’t provide real value and charge fairly for it, don’t play the game of business. Develop your skills a bit more first.
5. Assuming a signed contract will be honored.
A signed contract is just a piece of paper. What’s behind a signed contract is a relationship. If the relationship goes sour, the contract won’t save you. The purpose of a contract is to clearly define everyone’s roles and commitments. But it’s the relationship, not the paper, that ultimately enforces those commitments. When I understood this, I focused more on relationships and worried less about what was on paper, and my business deals went much more smoothly. Once you start falling back on the paper, the deal is already in trouble...Keep your business relationships in good order, and you won’t have to worry so much about what’s on paper.
6. Going against your intuition.
While you might think that logic is the language of business, that’s far from reality. If you base all your business deals on hard logic and ignore your intuition, most likely you’ll be in for a world of hurt...Intuition is a critical part of the decision-making process in business. Since business deals depend on relationships, you need to get a read on the other people involved in any deal you consider. If you get a bad read, walk away. If you get a good read, proceed with caution.
7. Being too formal.
In some settings a certain degree of formality is appropriate, but in most business situations being too formal only gets in the way. Business relationships work best when there’s a decent human-to-human connection behind them...Treat your business relationships like friendships (or potential friendships). Formality puts up walls, and walls don’t foster good business relationships...Formality is boring and tedious. People want to enjoy their work. If someone addresses me like a computer, I’ll respond in kind — by hitting delete. But if someone demonstrates they have a real personality and a good sense of humor, a connection is far more likely.
8. Sacrificing your personality quirks.
It’s perfectly OK to be your own weird self and to inject your own unique spirit into your business, especially if you’re in your teens or 20s. Don’t be afraid to be more like Steve Jobs… and less like Steve Ballmer. Don’t pretend to be something you’re not. Ultimately you’ll enjoy your work much more if you attract the kinds of customers and partners that want to work with you for who you are — warts and all. Send the people who only want to work with androids to your corporate competitors. They deserve each other...If other people can’t handle your weirdness, too bad for them. Focus your energy on the people who can.
9. Failing to focus on value creation.
It’s easy to fall into the trap of thinking that the purpose of a business is to make money. But the real purpose of a business is to create value. While it’s possible to make money in the short run without creating much value, in the long run it’s unsustainable...Why does your business exist? It exists to provide some sort of value, both for you and your customers. The better you understand what value you’re trying to provide, the better you’ll be able to focus...The world doesn’t need more selling or more stuff. But it always needs and wants genuine value creation, and that’s where you should direct your efforts.
10. Failing to optimize.
Although value creation is essential to a sustainable business, it’s equally naive to assume you can simply focus on creating value, and the rest will take care of itself. You may build a business that provides good value but loses money...Just don’t let yours stay that way...Once you have a particular business process in place, pull it apart and re-optimize it from time to time. Look for ways to make it more efficient. Can you get it done in less time? At less cost? Can you do it less frequently? Can you outsource it? Can you dump the process altogether?...If you find yourself doing the same repetitive tasks month after month, make sure you put some effort into optimizing them. Not optimizing is like throwing time and money down the drain. It’s often much easier to save time and money than it is to create them...More money means more resources for ongoing value creation. So value creation and optimization go hand-in-hand.
The Jenius Has Quoted.