Starting a Business? Avoid These Costly Mistakes

startupStarting a  business is exciting, but it can also be stressful. As you look forward to becoming your own boss, you also have to think about how to handle startup costs and stay afloat for the first year. It takes time to build a customer base, so get used to being frugal.

Following are some tips that should help you make it over the hurdles many new businesses face.

Pick the right location

When choosing a location for your business, you need to consider more than your personal preferences. For example, maybe you’d like to keep your business close to your suburban home, but if you’re opening a coffee shop, you’d be better off choosing a downtown location with a lot of foot traffic.

To help hone-in on some potential locations, think of your ideal customer and where that person spends time. Also, decide whether being adjacent to other businesses could help or hurt you. Many restaurants try to occupy spaces close to big-box retailers, so they can attract hungry shoppers. But if you’re too close to a competitor, you may have a hard time building a clientele.

Are you selling products that appeal to new moms? If so, you need to have ample parking nearby. Busy moms will often have children with them when they run errands, and they’ll be less inclined to stop at a store if parking is a hassle.

As a new business owner, it makes more sense to rent your space than buy it, because your property manager will generally be responsible for maintenance. But make sure the lease clearly defines who is responsible for repairs and what changes you can make to the premises — you wouldn’t want to get stuck with a space that you can’t customize to suit your needs.

Lease equipment

The leasing option applies not only to your location, but also to your equipment. Don’t buy an expensive fax machine or postage meter when you can lease and have the benefits of upgrading to a newer model at some point in the future.

It does make sense to buy a laptop or computer, if you’re going to use it for business and personal use. But you could save a lot of money buying a refurbished machine, instead of a new one. University or government surplus stores are good places to look for refurbished equipment.

Don’t overstock

Because your business is just getting started, you can’t accurately project how much inventory you’ll need. While it’s OK to stock up on items necessary to run your business, like mailing cartons, light bulbs and cleaning supplies, don’t overstock products. In business, it’s better to run out of something and have to reorder than to end up with a lot of unsold inventory.

Have a safety net

Don’t make the mistake of investing every penny into your new business. You should have money in reserve, just in case it takes longer than you anticipate to generate a steady customer base. When you have savings to fall back on and spend wisely, you should be able to make it through the fledgling stages of owning a business.

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Felicia Savage is a graphic designer and social media expert living in Indianapolis, IN. When she isn’t tweeting, drawing or exploring, Felicia enjoys running, swimming among other outdoor activities.

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