Start your business on the right foot with money saving tips from the Efficiency Expert

Entrepreneurs Can Save Money While Creating a Business With Room For Expansion

What is one of the biggest mistakes that entrepreneurs can make when starting up their dream businesses? While renting in a unsuitable location or overestimating potential may rank towards the top of the list, most entrepreneurs make the mistake of spending way too much money before their business takes off. Although you have high hopes for your business, money may not come in as fast as you thought, and looming rent, utility, and business loan payments must be made to avoid potentially crippling fees and charges.

An entrepreneur is usually filled with enthusiasm and confidence in their business, product, or service. This confidence can lead to extravagant purchases in the early days of the business that may be unnecessary. Before you spend $50,000 on office equipment, consider whether certain things are an absolute necessity. For a start up business, most equipment and office purchases should be made strictly on a necessity basis. While computers, printers, copiers, desks, and chairs are all office equipment that is most likely necessary, luxury splurges such as expensive artwork, fancy couches, or shiatsu massaging waiting room chairs will have to placed on the wish list.

When purchasing office equipment for your new business, first ask “Is this piece absolutely needed?” As for the case of a telephone, the answer is probably yes. As for the Thomas Kinkade Limited Edition Snow Portrait for $1,300, no. While you shouldn’t intentionally make your office look cheap to potential clients, you must be reasonable. Purchase the office equipment that you will need to start up. Should your business take off and become a cash rich or Fortune 500 company, then you will have more freedom to decorate and add luxuries. But for a start up company depending on loans for survival, simplicity is the key.

You may consider purchasing slightly used or refurbished office equipment to help save money. The lightly used equipment will serve the same function as a new piece while at a substantially lower cost. Refurbished copy machines or printers are repaired and checked over by a technician and may even offer a limited warranty. You may also check local listings for an auction selling off equipment from a recently closed business. Often times you can pick up quality products for a low bid. Although you may dream of one day having a fancy office, remember that the money-conscious start up may provide such luxuries later on.

Many entrepreneurs also make the mistake of hiring a great deal of employees anticipating a business success. As with the office equipment, ask yourself how many essential employees are necessary to complete the daily functions and tasks of the business. Should you hire 50 employees and your products take off very slowly, chances are you will have a $100,000 a month payroll that you cannot afford. You may end up paying employees to sit around waiting for business to roll in. Worse yet, you may be forced to lay off a large number of the employees. If your business can survive on the intensive, diligent work of 10 employees, start off there. As your business grows, you can determine the need for more employees and act accordingly.

As an entrepreneur, you must make the decision between when to save and when to splurge. You don’t want to be a stringent cheapskate who will save $200 a month by refusing to install a company phone line. However, you also don’t want to invest $50,000 in office equipment and hire 50 employees, only to find out that your business isn’t as profitable as you thought. Once you make the decision to purchase and employ as necessary, you can start the growth of a company that has room for expansion.

About Sozo Firm

Sozo Firm helps startup companies, small to mid-sized businesses & nonprofit organizations thrive through developing and implementing business optimization strategies. Our efficiency consulting addresses business processes, customer service, employees, marketing, public relations, and communication. Our internet strategy consulting addresses website usability, reputation management, social media, and internet marketing. Sozo Firm is based out of Stewartstown, Pennsylvania. Contact our senior consultant, Andrew Jensen, at 800.460.SOZO to learn how we can serve you.