5 Deadly Mistakes When Starting a Business.

Becoming your own boss can be a dream come, true - if you're willing to learn from other people's nightmares.

 For many people, starting their own business is a dream come true. But too many entrepreneurs see their dreams fall apart - businesses fail because of common issues that could have been avoided.

One-third of small businesses fail in the first two years, and a little more than half fail within the first five years.

But that doesn't mean you have to give up your dream. Here are five common mistakes to avoid, so you can build a successful business.

1. Too little cash

"The biggest issue that most entrepreneurs have is money - they're not properly capitalized," says owner of a management consulting firm that advises entrepreneurs and aspiring entrepreneurs.

In a report, Steve Hockett shared the lesson of how he learned the hard way when he set out to open his own business.

"A few years ago, I was working at a bank and it wasn't a good fit, I was bored and I wanted to become an entrepreneur," says Hockett. Without a business idea of his own, he decided to become a franchisee. Although he picked a very successful franchise, he admits, "I was undercapitalized, it too long for the business to build and my cash ran out." Forced to abandon the business after only a little more than two years, he was "devastated."

"The real thing I missed was anticipating my cash needs and being able to weather the first year,"  who has since become a successful franchise consultant. "One of the hardest things I've ever done was to make the decision to pull the plug on a dream."

2. Thinking small 

You may be competing for customers against larger companies with more resources. But you don't have to show it.

Remember, you're not small, you are boutique. You're not tiny, you are personalized.

3. Skimping on tech

Sure, buying gadgets costs money. But giving your employees laptops, Treos, BlackBerries and wireless access allows them to do more with less. In addition, the latest technology will help you and your employees respond promptly to customers, no matter where you are or what you are doing.

Ironically, it's often easier for a small company to adopt and deploy new technologies, vs. big companies that may be wedded to legacy systems and cumbersome, outdated technology. Your small size can be a plus, letting you be nimble and swift.

4. Underestimating the importance of sales

For small-business owners starting out, most of the attention should go to sales and revenues. If sales grow, expenses will take care of themselves.

And no matter how small, every company needs a, dedicated sales pro to make sure business is constantly rolling in the door.

If you are your own salesperson, practice on friends and family to hone your skills. "You could have the best idea in the world, but if you can't sell it, you won't be successful."

5. Losing focus

Every business should have a vision of what they will be when they grow up. And the more focused the vision, the greater the chances that the business will realize its goal. Further, the vision should be translated into specific execution tasks to achieve desired results.

Before embarking on your business carefully lay out all the attributes of your company and what you'll need do to make each aspect of the business succeed.

Share your experiences on mistakes that new businesses could learn from.