Perhaps the answer is yes, which would suggest that you are either:
– Super fit.
– Stupid or
– Not taking part.
If none of the above apply then common sense dictates that you conserve most of your energy for the event itself – the marathon.
Running your small business is very much a marathon, and the ‘energy’ I’m referring to in the context of this post is start-up capital.
Whether that capital is in the form of your life savings, a redundancy payout, a loan or external investment makes no difference – it is effectively a loan that has been introduced to the business and should be repaid.
Walking to the start: The temptation to start your business with a big splash is immense, which is why in 80% of cases small business owners have blown their start up budget before day 1. The logic being that the sooner you impress them, the sooner the money will roll in.
Unfortunately it doesn’t work that way because you have almost certainly not understood what will motivate them to buy. A new car will only impress your neighbours. Top quality office furniture will mostly go unnoticed and the celebrity launch party might be great fun – and might even get you some PR – but your prospects will buy when they are ready to buy.
Start at a gentle jog: Some expenditure is necessary – what that is will very much depend on the nature of your business. If you are a food outlet, then your entire environment must be seen as clean and safe – though that needn’t translate to new, or top of the range. If you visit clients your car should show professionalism – clean & second hand will do that well.
No matter how much cash you have gifted to your business, there is no merit in starting with too good equipment – if the client doesn’t see it and it doesn’t directly affect delivery, string and blue tack will suffice.
Build up speed: The time to start spending is when you can see strong and steady revenues coming in. Your customers and prospects will be impressed at the signs of success and growth – whereas if you over spend on day one they will just be a little surprised.
Your journey to that point will help you to appreciate your spending priorities.
Plan your route: Not surprisingly, the key to building steadily lies in your business plan – in this case particularly in your cashflow projections.
The projection that you have fully thought through, not the one you did with lots of big exciting numbers.