As a small business owner you've probably encountered dozens of people who say “Why aren’t you doing this?” or “You should try that.” Unfortunately, most of these pointers come from people who don’t have any experience starting or running a company. With this in mind, I would like to share some advice with you, one entrepreneur to another.
Startup Costs: Human nature causes us to think too big too soon. Startup costs for my company, Wasatch Software, were somewhere around $100 (website and business licenses), and overhead for the first several months was about the same. Here are some key categories that you might be tempted to overspend in:
- Technology: Opt for the $500 computer system instead of the beefed-up machine. Take advantage of inexpensive VOIP phone services.
- Office Space: Yes, it would be nice to have a plush office with expensive furniture right away. However, these things are not necessities and should be viewed as earned rewards as your business becomes profitable. Consider working from home until you can afford something better.
- Marketing: Concentrate on using time and effort in place of capital:
***Web Advertising: blogs, directories, forums, and organic search
***Networking: chamber of commerce membership (go to the meetings), friends and family, hand out plenty of business cards
***The Not So Fun Stuff: cold calls, outside sales
As you begin you are vulnerable to mistakes. Wouldn’t it be nice to make these without losing too much money? Try not to use business loans or personal cash if you can avoid it.
Be Patient and Persevere: Giving up may be the only thing that causes businesses to fail more than money. We all dream of being millionaires within a year of launching an enterprise, but it is more likely that you won’t start making money for several months, or even longer. Work a second job until your business can support you. Put in long hours for your own company after you are done 'working for the man' each day. Remember that the ability to keep going is what separates the winners from the losers.
Use Free Resources: There are many free resources at our disposal that go unused all too often. You can teach yourself almost everything you need to know by using resources that cost nothing at all:
- The Internet: Almost anything you need information about can be found online. Use the web to learn about building and marketing websites. Search for information on business finances, or anything else you need to know.
- Free Counseling: Seek out organizations like SCORE in your area and use them. You can visit with counselors for free about any business topic. You may also know other entrepreneurs. Most of them are more than willing to share their experience and expertise with you.
- Media: Watch shows like Small Business School and take advantage of podcasts. Also, read the newspaper, magazines, and books related to business and your industry.
Keep the Cash: You just made your first big sale! If you’re like me, you thought this was just the tip of the iceberg. Instead of spending the money or treating it as personal income, keep it in the company until you know this type of income can be earned consistently. Better yet, use the money to grow the business. Besides, you are trying to build something that can provide security for a lifetime, not a few moments.
Prioritize Your Effort: Take care that you spend your time on important tasks rather than details. I recall a personal instance that is especially applicable. I purchased a solution that contained many features our website needed. In the end, most of my time was spent configuring this add-on (adding/changing products, etc.) and more important tasks like marketing were ignored. My company has since switched to a solution that requires very little maintenance. This allows us to focus on bringing in revenue instead of a completing a less important task that could be done easier another way.
Hire Help Only as Needed: Take on employees only when two requirements are met:
- You are way to busy to handle all of your customers and also administer the business properly. There is no need to bring on more help (and thus give away your money) if you can handle the amount of business you currently have.
- Your profits over a period of time are enough (or close to enough) to sustain the increased expenses that a new employee will bring. Don’t hire an employee with the thought that they will suddenly make your company more profitable. They probably won't.
Wasatch Software has achieved millions in revenue over the past few years, and your company can too! Just know that effort and perseverance are your keys to the freedoms a successful small business can bring!
Labels: business, computer-systems, small-business, wasatch-software
