Avoiding Unnecessary Expenses is a Key To Success
Starting a business is exciting, yet overwhelming. You feel like you need everything and anything to help you be successful.
Don’t do it.
Too many startups today waste more money on products and services they don’t need that they can’t keep their doors open for more than a few months. Instead, take it slow and easy, making changes as you see the need for them, but not a moment too soon.
Avoid these mistakes and you’ll put your startup on the roadmap to success early on.
Bringing on too Many Employees too Soon
It’s easy to want help when you start a business, but over hiring right away leaves you at a loss. Hiring people before you know what you need help with wastes money and resources. Instead, wait and see what you need.
If you can’t run your business solo, take on one or two people but as a ‘jack-of-all-trades’ type employee. Don’t hire specialized employees, like HR, accounting, marketing, etc. until you know what you can and can’t handle. Get a better idea of your profits and what you can afford rather than putting the cart before the horse.
Outsourcing Leadership too Soon
It’s easy to get overwhelmed fast when you start a business but don’t let that make you dip into your pocketbook. If you aren’t wildly successful from day one, don’t think you need to outsource your leadership. Don’t undermine your own skills because it didn’t work out how you thought right away.
Think about it, if you outsource your leadership, you’re giving away your secrets and if a wildly successful version of what you do isn’t available already, no one else knows the secrets either. Think of it as a bit of trial and error. You’ll have ups and downs, that’s a part of owning a business. Don’t jump the gun and hire out too soon.
Buying too Much Space too Soon
Owning a business is all about dreaming big, but don’t buy into those dreams until you’re ready. While you shouldn’t buy such a small space that you outgrow it from day one, don’t buy so much space that the rent is hard to keep up with.
Instead, look for the perfect space that allows some room for growth, but not too much. Bonus points if there are vacant spaces on either side in case you do get wildly profitable fast and need to expand.
Trying to be too Cheap
Trial periods, cheap products, and short-term services all seem like great ideas because you save money, right? In the long-run, they often hurt you rather than help.
Instead, think long-term. What products and services do you need today that will continue throughout the time you own your business? For example, accounting software. You can go cheap and pay monthly or you can buy a 12 – 24 months subscription and save hundreds (sometimes thousands) of dollars. Look at the big picture.
Trying to be too cheap costs you more in the end. It’s a lot harder to shell out $1,000 today than it is $100, but if that $1,000 saves you money in the long run, it’s worth it. Prioritize your budget in the areas you need to spend to have a profitable and growing business and don’t short-change yourself.
Buying too Many Tools too Fast
You’re going to get bombarded with advertisements and sales calls. Companies have radar for startups – they know you’re vulnerable and will feel like you need everything under the sun to get started.
Think realistically. What do you need to open your doors and operate for the first month? That’s what you buy right away. Any tools that you can’t operate your business without are necessary. Anything beyond that can wait.
See how your business does and what voids you and your employees find that you must fill. The answers may surprise you as you work through the first few months. You may have employees with amazing ideas that fill a need or you may find that certain ‘issues’ you thought would be a problem weren’t after all.
Not Focusing on Accounting
Accounting is where your profits are at – if you don’t focus on the books, you won’t create a profitable business.
This is one area you can and should outsource right away unless it’s your specialty. If accounting was never your thing, let the professionals handle it. Not only will it help your bottom line daily, but it will help you at tax time too.
If you think personal taxes are overwhelming, you’re in for a real treat with business taxes. A professional can help you find all the write-offs, help you understand estimated quarterly taxes, and how certain decisions affect your bottom line.
Not Marketing Right
Marketing is just as important as accounting, but don’t overdo it. Take advantage of the many free advertising options at your disposal, aka social media.
Don’t think you have to invest in large billboards, print advertising, or even pay for social media advertising. Take it slow – starting your social media pages and using traditional forms of advertising, all of which are free or close to it.
As you grow and get the hang of basic advertising, you can start paying for more robust options, but not too early or it will take away from your profits and possibly your company’s wellbeing.
The key is to start slow. Eventually, you’ll work your way up to hiring more employees, expanding your space, and buying helpful products and services. For the time being, focus on the root of your business – the reason you started this concept. Everything else will fall into place as you focus on what you do best.
Trying to do too much too soon will only make things harder because you’ll constantly be trying to catch your own tail. Don’t start off upside down – instead, give your business a fighting chance by being a reasonable business owner.