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Jerry was in the startup phase of his very own business. He went all out and set up an office many business owners would only dream of.
He had the top-of-the-line computer system and a desk fit for a Fortune 500 CEO.
The money Jerry spent on advertising and getting ready for the grand opening was enormous.
Everything was looking really good for him, and he was on cloud nine planning, organizing, and getting ready to live his dream. Unfortunately, that day never came.
You see, Jerry purchased so much of "only the best" before the appropriate time that he didn't have enough cash left to properly operate the business. Jerry was forced to shut down before he really even began. He only got a short taste of his dream. Will this happen to you?
Starting a business involves many issues, and you don't see a lot of them until you're faced with them. Some costs can be put off until a better time. Some costs you won't be able to put off. And then there are some issues you should put off until a better time.
Here's a good way to look at starting a business. When a business is in the startup stages, it keeps going until it runs out of money to operate. So the more money you have, the longer you have to succeed and build stability.
The quicker you go through cash, the more the pressure is on and with more pressure comes a greater number of mistakes and greater intensity of each mistake.
Make life easy, and go easy on the cash. Here's a tip: if you purchase everything you want in the startup phase of your business, then remember that you may not own it for very long.
Here's another good reason why you should wait. During the startup phase, you're conscious of where your money is going, and you may make your purchases with only price in mind ("How much can I get with the money I have?") rather than what the best solution is. When your business is more stable, you tend to look more toward the best solution instead of just what you can buy with the money you have.
You can cut costs to a bare minimum, but only where it's applicable.
For example, if you've opened a new hairdressing salon, you may cut down on the cost of computers, faxes, and office furniture as well as other business tools, but it would be a huge mistake to cut down on the chairs, hair dryers, or utensils used for the clients. This would be a disaster, because then you're not cutting your expenses but cutting your own throat.
You must appear to be top of the line when it comes to issues used or viewed by your customers. They have to feel at ease when they're doing business with you. They have to feel they're getting the best service available to them.
After all, it's simple and very desirable to get moving at full speed and purchase the nice furniture, top-of-the-line equipment, nice office, etc. I've done it. I'm the type who likes everything to be top-notch from the beginning. And you know what? It's not worth it.
It's too much of a headache. It's better to spend the money in the right places and luxury is not the right place. The better stuff can wait. Got the urge to spend money? Then purchase your business's stability, purchase your freedom, and spend wisely!
That's the way I see it.
Acey Gaspard
A Touch of Business.com
Action Steps to Avoiding Spending Money During Startup Mode
- Make a list of WANTS and NEEDS for your business but don't just stop there. Prioritize the items on your NEEDS list to ensure that the money you spend really goes to items or areas that really need it.
- For each WANT and NEED, have an ALTERNATIVE column. Is there really no way to solve this want or need but to buy it or spend money on it?
Important Points to Avoiding Spending Money During Startup Mode
- Spending money is always easy; but when it comes to setting up your own business, moderation is key!
- Don't spend on items or areas that do not affect clients immediately.
- Keep in mind that spending money on 'the best' and 'most expensive' items is money OUT of your business operating wallet.
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