Five Common Mistakes Young Adults Make When Starting Up a Small Business

College campuses are becoming a fertile breeding ground for up-and-coming business owners.

A recent study by The Global Entrepreneurship Monitor shows that 18- to 24-year-olds in the United States are starting businesses at a faster rate than 35- to 44-year-olds. Now is your prime time to consider opening up that tattoo parlor, bed and breakfast, or wilderness expedition center you've dreamed about.

So whether you've established a small business, are in the midst of launching one, or simply considering it for the future, it's certain you want at least one thing out of this investment: success.

But it won't be a cakewalk. It's hard to believe, but over 50 percent of small businesses fail in their first year and 95 percent fail within the first five years, according to the U.S. Small Business Association. Starting a business is risky for most, but success can come for those who proceed with logic and discipline.

Here are five common mistakes people tend to make when starting up a small business – and how you can avoid them:

1. Business owners don't create documented procedures for the day-to-day operation. It's a simple equation: Systems = freedom. A "working procedure" is a documented description of how to perform a task. Having it prevents random problems and ensures the task is performed exactly and consistently. Procedures help you delegate, improve your scheduling ability, and allow you to work smarter and accomplish more with less effort. Thus, work less and make more. It's ironic, but by implementing documented system procedures, your employees are free to be creative because they don't have to "wing it" each time they perform their job duties; everyone operates at a smoother pace because there is a proven, working process. Everyone knows what to do and what to expect. Your people don't have to be mind-readers or fortune tellers.

2. Owners don't delegate – they are "doing the work." The reason a business owner can work a few hours a week, or take an extended vacation without stress, is because they have created systems, implemented written procedures with supporting documentation, and have learned to delegate. I know, I know. You're zealous, dreamy-eyed, and proficient at what you do, and as the leader of an organization, you're committed to doing whatever it takes to get your new business off the ground. Successful people don't work harder; they work smarter. This means focusing on what you do best, and delegating the rest. Ask yourself what you enjoy doing least for your business. Perhaps that's bookkeeping or making phone calls to potential clients. Then, imagine literally giving away these tasks. Get rid of the "I am Superman" attitude and hire people who are trustworthy and qualified to take much of the weight off your shoulders.

3. Owners don't use time wisely. Biological Prime Time is when your brainpower is at peak capacity. People function at maximum effectiveness about six hours out of a 24-hour day. It is important to understand this interesting facet of human performance, determine precisely when your prime time occurs, and then use it wisely. Six hours out of a 24-hour day is not much. Presuming you wish to reach your goals sooner rather than later, it is best the tasks that contribute most to your primary goals are performed during your prime time hours and you protect those hours from interruption. Also, don't start your day without a to-do list. Make a list of tasks and categorize them into business-building activities, client activities, and personal items. Then, prioritize, remove distractions, delegate, and stick to your plan.

4. Owners see their job, life, and business as "holistic." You must change your fundamental perspective to see the elements of your world as separate, linear systems. See that these systems can be perfected, one-by-one. Understand that by perfecting a primary system's sub-systems, the primary system will be perfected – and, although you are taking a non-holistic approach, your end product – your business – will be a highly efficient, entirely holistic, "Primary System."

5. Owners don't have a strategic objective or set of operating principles. A strategic objective is short, usually a single page in length. It defines overall goals, describes methodology, and prescribes action. It gives direction for making major and minor decisions. It's an essential instrument for a business and for personal life. General operating principles are a two to three page collection of "guidelines for decision making" that are congruent with the strategic objective. Essential for the work environment and in a simplified and shorter format, they also guide one's personal life. Two examples of simple operating principles are "Do it now," and, "choose the simplest solution."

10 Tools to Rev Up Your Business and Personal Communication

If you are a manager in your organization, there's most likely a reason for that – people trust you, think you do quality work, and respect you as a leader. But if you're not an effective communicator, you'll lose that reverence and you won't retain employees.

A study in 2001 involving some 20,000 exit interviews found that the number one reason people leave jobs is "poor supervisory behavior." In other words, bad bosses.

And one of the biggest factors cited in the findings was poor communication skills. Discussing communication mechanics can be a monstrous proposition, so let's boil things down. Utilize the following basic communication tips, applicable to both business and personal life, and watch your network of friends, colleagues, and valued employees expand.

1. If there's a problem with someone, have a meeting NOW. Talk things out one-on-one. If silence ensues, do something to promote dialogue. But be careful; if emotions are running high, put point-of-sale aside and wait for things to calm down.

2. Be accessible. Give people an opportunity to leave a message if you are not available. Can those people who are important to you reach you readily, or are there mechanical and bureaucratic barriers?

3. Make communication tools available to your staff — cell phones, digital recorders, voice mail, e-mail, and various meeting places for one-on-one, in-person dialog. Scheduled group meetings are prime tools that provide everyone a forum for communicating. Keep meetings brief (training classes excepted).

4. Can your staff, clients, and potential clients find out more about you through a Web site, hard copy, or other medium, or do you remain a mystery? Do you talk about your world to the people around you or do you keep to yourself? Mysterious people typically don't do well in business or friendship.

5. Yes, it's important to keep lines of communication open, but are you going back and forth with a person who consistently works against you? This could be in a personal relationship or with an employee or client. If the other side's intentions are consistently malevolent, it's irrational to continue to communicate. End the relationship. You are not in the business of being coerced. Do you have a close family member who is on the attack? If so, I sympathize. That's a tough one.

6. Be concise. Get to the point. Unless you are at a barbecue on a Saturday afternoon, do yourself and those around you a favor by getting on with things.

7. Be cordial and friendly, but don't overdo it.

8. Never bash others behind their backs. It's low-class and any employee, client, or relative who has any degree of personal sophistication will devalue you.

9. Talk up to people if that is the context. Your client — who is paying you — wants the bottom line and your personal friendship is not part of his or her expectation. Likewise, with your boss. These people expect you to listen to them and not to give orders, although they want you to provide them advice. Again, while you take direction and provide information, be cordial, but not too cordial.

10. Speak authoritatively to the people you direct. They want respect, concise direction, and they expect their paychecks to be on time.

Be Home in Time for Dinner: 4 Ways to Work Less, Make More and Increase Productivity

Maybe you enjoy working the long hours.

Yes, staying late to work on a deadline project or to finish the twenty things on your task list probably makes you feel a bit nobler than your cubicle-mate (who jets out the door as soon as that wall clock strikes 5 p.m.). There's a sense of pride that comes with being in charge, having employees "under you," and being the one that comes in at 5 a.m. and then stays late, burning the midnight oil.

But, working long hours is exhausting. And having nothing on your paycheck to show for it should cause you to consider changing the way you approach your business or your job.

Nearly 40 percent of Americans work more than 50 hours per week, according to a study from the American Psychological Association. Now, as heroic as those long, industrious hours may seem, a recent study claims that overtime could land you in the hospital – yes, the hospital. People who report stress at work are 68 percent more likely to develop coronary heart disease than those who report no stress at work, according to research from University College London (UCL).

So sidetrack the medical bills and simply make a few adjustments to the way you approach your job or your business, and you could experience freedom and wealth that come from working less and making more.

1) First things first, you need to humble yourself. Stop priding yourself on being an expert at every facet of the business. Delegation is a must. You may be like the majority of people who dislike delegating because they believe the delegated task will "fall through the cracks," and never happen, or it will get done, but not properly. By holding on to tasks, all you do is cause more stress and lead others to believe that you don't trust them or don't want them to take on new responsibilities. So delegate. And do it in writing, so the task being assigned is clear and detailed, has a due date, and can't slip through the cracks. But never delegate an assignment and completely leave it up to the other person to make sure it is completed. Be accountable and follow up with your coworker or employee to make sure the task is in progress or near completion. Maybe make Microsoft Outlook's task feature your best friend.

2) Create written documentation. Over 50 percent of small businesses fail in the first year, and 80 percent fail within the first five years, according to the U.S. Small Business Association. The single, major difference between a small, floundering company and a large, successful company is that the large business employs documentation. This can't wait until tomorrow. If you already own a small business, and you don't have documentation, carve out time today, sit down, and develop a strategic objective for your business. This should define overall goals, methodology, and prescribe action. It should give direction for major and minor decisions. Like a mission statement, but punchier and more specific. Once you have the strategic objective, move on to your general operating principles. This should be a two- to four-page collection of guidelines for decision-making. And, third, you need written working procedures – instructions that describe how the individual systems of the company or the job are to operate. You should have a written procedure for nearly every action that takes place in your work environment, including how someone should answer the phone, make a deposit, or call for repair of the copier.

3) Eliminate time-wasters. If you own a business, your mission is to work hard but not long, to reduce the workweek by 95 percent, and to make more money than you require. If you have a job, the goal is to quickly ascend the management ranks until you can call your own shots. But no matter what your situation, if you are going to work, then work! Turn the radio off, get your feet off the desk, stop the pointless babbling with a coworker, and put your head down. Get in, do the work, and get out! Instead of checking e-mails 35 times a day, check 5 times a day, at designated times. Suggest polite ways for keeping a conversation moving along, especially if a long-winded coworker comes into your office for a "quick question," then starts recapping last night's episode of American Idol from start to finish. And what about staff meetings? Are they a waste of time? Yes, if you don't have an agenda.

4) Work for 98 percent perfection. Time and money wasted is time and money gone forever. And a waste of time and money means some other positive thing that could have happened, didn't. Apply a "good enough" rule to your work: A 100 percent flawless document that took forever to create carries an imbedded imperfection: The extra time spent creating the masterpiece – that extra 2 percent – is lost forever, therefore the finished product carries an imbedded taint and – catch 22 – you can never call it "perfect." Your work and your written procedures should be "good enough" so the desired results are consistently produced while valuable time isn't spent on absolute perfection.