Starting and running your own business can be very rewarding. However, in order to achieve success, and reap the benefits, you have to set goals and try to avoid as many mistakes as you can. Most importantly, in order to be a great entrepreneur, you have to make sure you’re spending wisely. More often than not, money will be tight when you’re starting a new business. Overspending or misallocating funds can be detrimental to your business. Below are my five tips for smart spending that can help lead you to success.
- Know your numbers daily. In order to ensure that you’re being effective with your money, and spending it on things that are of the utmost importance, you need to be in the know about what’s being spent, whether you’re doing the spending or if it’s an authorized member of your staff. Before starting your company you should know what’s going to be needed in terms of operations, inventory, shipping and every other cost involved with your specific business. Get real clarity on those things and make sure you go through them thoroughly so you stay within your budget. Once the business gets off the ground you should constantly be checking to be sure you’re on target while also concentrating on bringing in revenue – hopefully more than what you’re spending.
- Don’t buy things you don’t need. Everyone wants a great looking office with beautiful chairs and fancy tables, but before spending on items in that category you need to be sure you’re buying for necessity. This goes for anything you spend money on, whether it’s office space, or even products. When you’re trying to start and run your own business you cannot waste money, period. Buy only things that you absolutely need, things that are “business essential,” and when you begin to show success you can start evaluating and looking over your budgets to see where you can buy things you may have wanted previously.
- You (the CEO or Founder) may not make much, or anything, to start. That’s OK. I started my first company when I was 23 years old and I have started eight other companies since. I’ve gone a few stretches, short and long, without paying myself or paying myself very little. Most entrepreneurs (not speaking for myself as I’m in it for different reasons) are in it to make money, but it doesn’t happen over night. One good thing that I’ll tell you is that once you actually start making money, it feels that much better when you write yourself a check. Hard-earned money is the best type of money.
- Don’t risk funds on unproven marketing channels. These days everyone wants to produce the best ads and have the best marketing campaigns, but when you are small and new, nothing’s wrong with playing it safe and going with the stuff that works. So maybe you won’t have Super Bowl commercials like the big boys, but there are great marketing and advertising channels that are less expensive that can work for your brand. If funds are limited, use them on the important things and start thinking outside the box when it comes to marketing.
- Go back to #1… I can’t stress enough the importance of knowing your numbers. This is a lesson I’ve learned early on in my entrepreneurial experience: numbers are king. This is a huge key to success. Also, make sure the people who are working in and around your organization understand the numbers as well. The better the grasp you have on everything that has to do with your company, the better your company will be. KNOW YOUR NUMBERS.
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This guest post is courtesy of Mark Samuel, CEO and Founder of Fitmark.