I run into many people who have ideas for starting a business but they are never comfortable turning that idea into something more. The primary reason I hear for holding back is money – money lost from a consistent paycheck from their current employer and the lack of money needed to start their business. When starting out, you’ll need to have established some sales before considering ending your current job and losing that paycheck. These initial sales will provide validation of your business idea and give you confidence to breakaway from your current job when the timing is right. Once you make the decision to start a new business you need to ensure that time committed to your startup does not impact your performance at your current job as that paycheck will provide you with your startup funding.
Read any article on starting a business and you’ll see most businesses that fail to succeed either had a bad idea or failed to manage their cash flow. Cash flow is critical throughout the life of your business but probably no more important then when you’re starting up. During startup, you can very easily spend all of your cash on office space, technology, adverting and employees. How can you stretch those dollars? Here are a few suggestions:
Office space – if you can’t work out of your home, then consider a virtual office provider like Regus which has over 1,000 global locations that allows you to “rent” office space as needed. Regus can provide you with conference room and audio/visual services so that when it’s time to impress your clients you can. If you don’t need the space Regis provides other benefits such as a physical address with mail handling. Let’s assume you’re an advertising service provider based in Broken Arrow, OK but want to work with the larger firms based in New York City. With Regus’ physical address service you could have a business address of 590 Madison Avenue, Manhatten, NY 10022 which may better position you to attract NY-based businesses.
Phone service – Grasshopper is a hosted phone service that allows you to provide a full-service phone service for you, your employees and customers for as little as $12/month. With Grasshopper, you can setup extensions for each employee as well as group extensions (e.g. Sales, Support, etc.) and then have those calls redirected to your mobile or home phone. Faxes can be received and are then emailed to an address you define. Grasshopper has a variety of additional premium services with my favorite being the ability to have professional voice over people record your mailbox messages.
Employees – if you decide that you need additional help when starting out, employees will add significant complications to the management of your business. With employees on board, you are now required to to file a variety of tax forms as well as incur costs associated with social security contributions and workman’s compensation insurance. Depending upon your needs, you may be able to use services like Elance or TaskRabbit to have “contractors” perform the work you need completed. Before making this decision, check with your accountant.
Technology – the cost of getting a technology infrastructure setup for you new business can be exorbitant. Luckily, there are numerous virtual office hosting options now available. One of the leaders is Microsoft 365 which can provide you and your business cloud-based access to Microsoft Office products including email, calendaring, Excel, PowerPoint and OneNote. Additionally, they offer team sites, a public website and anti-spam filtering. Costs start as low as $4/per user/per month which can provide significant savings over the $275 for a full version of Microsoft Office you install on your computer.
Business cards – using services like VistaPrint you can get up to 250 free business cards.
Keep in mind that your originally customers are evaluating you on the quality and price of your product or service and not how fancy your office space is so invest your money where it counts – in your product – and let you image come later.