Getting started in your business…
Or Don’t Spend a Dollar When a Dime Will Do – Starting small is a slower path, but it’s also a safer way of building both a sustainable business and a long career as an entrepreneur. Plenty of well-known companies have started small. Space inside Kinko’s first store was reportedly so tight that founder Paul Orfalea had to roll the copier outside to make room for customers. Ben Cohen and Jerry Greenfield delivered pints of their ice cream to local grocery stores in a beat-up VW Squareback wagon.
How Starting Small Can Help You Succeed –
- It can limit the size of your mistakes.
- Starting small will force you to learn resource frugality – preventing inefficiencies from entering your operation.
- It can give you a competitive advantage.
- Your lack of funds may force you to redirect your venture in a positive direction.
- It allows you to maintain a higher percentage of ownership.
- It will keep shut-down costs low.
You must convince yourself you can do more with less, be willing to scrounge, beg, barter or trade to get space, materials, equipment or services.
Getting Space: At the beginning, you should acquire prime real estate only when it’s essential to the business model – not to support your ego.
Getting Machinery and Equipment: Instead of buying new, see what you can find at a discounter, secondhand shop, flea market or rummage sale. Examine carefully whether you really need specific equipment, then decide whether to buy or lease.
Marketing: Many very successful Web sites have found nontraditional marketing approaches to be highly effective. If more traditional marketing is needed, try to cut expenses as much as possible. You should be constantly thinking about no-cost ways to market your company.
Controlling Expenses: Fly only coach, stay at budget hotels and rent only compact cars. Sam Walton controlled expenses by instituting a rule that expenses should never exceed one percent of the company’s purchases.
Finding Initial Capital: There are several rules to follow when gathering initial capital for your venture.
Here are three:
1. Dip only modestly into your nest egg.
2. Debt is a common source of capital for many companies.
3. If you need to borrow a small amount of money, try not to get it from friends or family members because there would be too much emotion tied up in the money.
Incorporate these concepts into your start-up and you’ll help improve the odds you’ll be around a year from now.
Michael Shapiro – Dynamic Management Solutions, Inc.