Knowing what you really need versus what is a luxury isn’t always easy to figure out especially if you’re a new entrepreneur who has never started a business. Some expenses are impossible to avoid and are essential to opening your doors. The small expense of forming an LLC or other business structure is an essential task but others are not. Don’t make these expensive mistakes.
Expensive Office Space
If you aren’t opening a retail business where customers have to visit your store, you don’t need expensive office space and for most businesses, you don’t need any office space at all while you’re just getting started. Leasing office space is expensive and adds very little value to your startup that a home office can’t accomplish.
You likely planned for the unexpected events but if you’re like most new entrepreneurs, you didn’t budget enough. Every new business owner is optimistic and believes they have a lean and efficient plan to get them through the tough first years but the unexpected expenses that arise will likely be much higher than you anticipated. Some experts advise adding 20% to your best educated guess.
How many of these items do you have worked in to your budget: Company polos, expensive logo designs, stationary, pens, stickers, high end websites. Get rid of these expenses unless your business specifically needs them. If you’re a PR firm you might want to have some PR materials to show off and technology companies should invest a little more in to their web presence but most startups can afford to wait on the specialty embroidered polos.
Yes, it’s true that you need to spend as much time as you can on your business and should hire somebody to take care of tasks that will take a lot of your time but when cash is tight, there are plenty of services you can figure out on your own. If you can’t, ask a friend for a favor. A simple Google search might save you a lot of money when problems arise.
Spending money is necessary but squeezing all of the value out of every dollar you spend is even more essential. Purchase what you need but in the beginning take on the attitude that all luxuries will be set aside until the company is producing a healthy income. As you grow, the cool looking polos will be on the backs of everybody.