Home Business Growth On A Shoestring Budget By Dock Murphy
There are two cardinal mistakes smallhome based business entrepreneursmake - two mistakes that usually costthem not only their businesses but insome cases may have additionalfinancial ramifications from which itwill take years or even decades torecover!
The first mistake is thepremature purchase of high end equipment, materials, supplies,and shop or office space. The secondmistake is the attempt to prematurely grow the business and let it soar. Either of these mistakes can beextremely costly to your business.Financially it can be very devastatingand this is something you can avoidif you plan ahead.
As odd as it may sound, but premature growth and high endequipment have rung the death knell for more than just onepromising business! Consider the first problem: the expenditureof funds for items not yet needed.
If you are starting out as abaker, for example, you need an oven. Until you have a lot ofbusiness, a small oven will do fine; sure, you may have to spenda bit of extra time baking and moving different dough andpastries in and out of it, but for the time being, you will beable to make do.
As your business grows, you will take in enoughmoney from your profits to buy that bigger oven you need. Next,when your business continues to grow, you now have the fundsnecessary to buy that huge oven with all the bells, whistles,thermostats, and other gadgetry you have been eying for years!This is the smart way to go and it will pay off in the long run.
Unfortunately, quite a few entrepreneurs will start outspending money they have not yet earned on buying the biggestoven possible. Going into debt – in some cases makingquestionable financial decisions with respect to credit cardsand second mortgages – will mark the beginning of the consistentpotential for financial ruin. Failure to grow equipmentgradually in keeping with the business is at the root for a highlikelihood of fiscal ruin.
The second mistake is a bad as the first: trying to make thebusiness fly before it can crawl. A business needs time to catchon and build a solid base of repeat clientèle. Sure, you may getthe windfall of that big client that spends more money than half your small clients put together, but if that contract is takenfrom you tomorrow and you do not have your well developed baseto fall back on, the odds are good that financially you will notbe able to sustain your business.
Home business growth on a shoestring budget is always gradualand deliberate, appealing to a small niche rather than chasing amass market appeal. In this manner the business will weathereconomic downturns, the loss of larger clients and in some casesalso the need for the replacement of durable equipment. Failureto heed this advice may leave you with a second mortgage, unpaidbills, repossessed equipment, and in some cases even the needfor bankruptcy protection.
About the author: Dock J. Murphy is owner of Plug in Profitand writes on a variety on a variety of subjects. Visit:Plug in Profit.