It is an exciting time for anyone who's ever dreamed of being their own boss. Across the U.S., new start-up hubs are growing and a variety of policies are making it easier to start a business.
But the reality is many start-ups don't survive their first year.
Related: Mark Cuban to Young Millennials: Live Cheap – Clothes, Cars Don’t Matter
Earlier this year on the private messaging app Cyber Dust, billionaire entrepreneur and "Shark Tank" investor Mark Cuban shared five rules every entrepreneur should follow to avoid failure.
These rules transcend sector and location, he said. In fact, Cuban credits much of his personal success to following them.
1. Do your research
Before starting a business, Cuban does extensive research on an industry to see whether the opportunity is compelling and potentially profitable
"It really does involve knowing an industry well, which is why I avoid investing in industries I don't know," Cuban said.
"You need to turn over every rock and open every door to learn your industry. This process never ends."
Related: Mark Cuban: Here’s What You Need to Do Before You Start Investing
2. Make your business plan flexible
If you think your business plan is set in stone, think again. Cuban stressed the importance of leaving business plans "open for change.
3. Rethink your funding strategy
Getting cash for your business is essential, but there's a right way to do it.
"You should do everything possible to not raise funds," he said. "Sweat equity is the best equity. I would turn to crowdfunding [sites] like Kickstarter before I would look for investors."
4. Be better than the competition
"You execute better than they can," Cuban wrote. "Do a better job and have a compelling differentiation that you always build on.
5. Stay away from over-crowded sectors
Entrepreneurs shouldn't start a business in an industry that's already crowded, Cuban said. Instead, they should look for gaps in the market where they can add unique value.
Of course, once you've got your business up and running, it's time to step up and be a leader. Check out Cuban's advice on what not to do if you want to be a great boss.
This article originally appeared on CNBC. Read more from CNBC:
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