So many unnecessary expenses when creating your company added to your lack of experience and the number of offers that you receive daily that offer you the formula of success, become the perfect mix that could lead you to failure without having tried it before.
Either a physical or digital business, the impatience to have a professional aspect, and the desire to succeed can lead you to incur unnecessary expenses when creating your company.
For example, I made these mistakes with my digital publication, in my effort to make it look like a successful business I took unnecessary expenses, I made decisions without first having advised me, and finally, they ended up being errors with economic implications.
I learned the hard way what are the unnecessary expenses when creating your company (losing money). I hope that you, who are beginning to undertake, learn from my mistakes.
Let’s start, here you have 10 unnecessary expenses when creating your company and a solution for each of them:
1. Invest in a logo:
I start with the mistake that has cost me the most money. I am not saying that having a logo is an unnecessary expenses, I am saying that investing hundreds or thousands of dollars in a typographic design, for a business that you do not know if it will be profitable or not and that you are just beginning, is the best decision.
The lighter your costs are at the beginning, the better. Your idea is not yet billing, and if it is doing so, surely you have not reached the point of equilibrium, so do not make a large investment in this aspect yet.
Also, I regret to tell you that large companies or potential clients will not close deals with you because you have a nice logo or a very well defined brand identity, so focus on what’s important.
You can use platforms with Fiverr and 99design that for a reasonable cost will design a logo for your business. Continue reading: Some tips to limit the risks when starting a business
2. Offices and expensive spaces:
We all have the dream and the mental image of our business launched. We imagine beautiful offices, full of MacBooks and creative spaces.
There is nothing wrong with dreaming, aspiring to achieve it and working for it, but for the moment focus on the most important thing that is to invoice, move your cash register.
In addition, starting this should not be your priority as there are other more important aspects when creating your company than the decoration of your workplace. Or tell me what good is a nice space that does not generate income to sustain itself?
If you are undertaking alone, as is my case, still less. There is no need for a spacious and luxurious office that satisfies your good taste if you are not billing and generating income to support this. If you have a work team, look for a modest space that has the minimum conditions to work comfortably.
You can work in the house of one of the partners, in a garage or rent a coworking space where there are several businesses in one place. In many cities, local governments offer very affordable spaces for entrepreneurs in the early stages, this is another viable option.
3. Hiring unnecessary employees:
Hiring people is one of unnecessary expenses, you do not need because you want to feel that your business is growing, is a serious mistake. This will not only take away flexibility from your business, but it will also make you responsible for paying a salary with all your benefits to a person every month when you are just beginning to invoice.
If you are undertaking this, it will only be more difficult, but not impossible. If they are a team they should look for it to be interdisciplinary, that is, that each of the partners contributes a unique value to the business.
This way they can save at the beginning a series of employees since each one covers a function within the company.
In case it is mandatory to hire a person, try to become a business partner, offer a percentage, as long as their capabilities offer something new to the company. This will help the salary is not so high and its level of involvement is higher.
Finally, you have platforms like Fiverr and Upwork that are a community of freelancers that can do the job you need for a reasonable price.
4. Website design and creation
Currently all businesses, not to say that most, need to have a presence on the web. A digital presence This includes a website, blog and some social networks.
So far everything is going very well, as entrepreneurs we understand this need and we know that it is something we must do.
So what is the problem?
When we pay thousands of dollars to a digital agency or private person to design and put into operation your digital presence. Why is a problem?
First, because it is a lot of money, and while these services are worth it, this does not mean that you have the resources to invest them in this way.
Second, because you are not learning, and if you do not know how to edit or publish on your website it is the same as if you did not have it.
You do not need anything complex and much less with all those specifications that you imagine. To start you need to be found, a contact information depending on your business, or a blog to start.
You do not need to be an expert, and with such simple tools as Bluehost that give you the domain for the purchase of a very cheap hosting service, and above offer you all the support and assistance service 24 hours a day, 7 days a week, You will be ready to start.
5. Gurus or success programs
Do you seriously believe that successful and serial entrepreneurs spent their money on gurus or programs that teach “the secret formula of success”? Do not waste your money, much less your time, on things that guarantee success.
First, because there is no secret formula to achieve it, second because you do not have time to lose, and third because if it existed you would not believe that someone would give it that easy.
Now, to make matters worse, the people who offer you this are rarely successful entrepreneurs. It is very different than Bill Gates mentions you to do an Instagram account with a few followers that promise financial freedom (although later we will talk about this).
I ask you the following question, do you think that Mark Zuckerberg subscribed to a successful course or paid a “wise guy” guru to succeed in his company? Do you think that Steve Jobs, Elon Musk, and Walt Disney did that too? I doubt it very much, and I hope you do too.
What successful people did was to work hard, strive, think differently and have a broad perspective of the problem they solved. So do not spend your money on secret formulas to get to the top, it does not exist.
6. Following Instagram accounts that show you paradise
It is good to want some motivation and inspiration when you enter this social network, and more when you are undertaking and you feel the difficulties of creating your company.
Now, one thing is to motivate you and quite another is those courses and programs that teach you “for only $ 100 dollars” like being an independent entrepreneur.
Who is telling you? What has that person done in life to have the authority to teach you how to be a successful entrepreneur?
I’m not saying it’s wrong to follow accounts that fill you with the spirit of wanting to be successful but move from there to paying an account that publishes beautiful images of luxury cars and jewelry, is a clear warning that you’re about to lose your money.
The most outrageous, in my view, is that you paint a very partial world, with a few Ferraris, beaches in the Caribbean and a clock of 20,000 thousand dollars … this is not entrepreneurship.
Or at least, it is not the enterprise seen under a complete panorama. Those who are undertaking, who are living the creation of their company in their own flesh know what I mean.
In my case, I do not have time to lose seeing images that teach me the power of passive income since I have to focus on generating content and undertaking with my digital publication.
My invitation is to use your time wisely, to spend one or two hours a day, maximum, to inspire you and then continue doing what really matters.
7. Planning indefinitely
What you will read below is very serious, many entrepreneurs have had to go through this, and if you do not know how to manage it may be that your business fails and never comes to light. This is called paralysis by so much analysis and I suffered it.
Here are some symptoms that indicate that you are also suffering and need help:
- Spend all day considering possible scenarios in your business
- You want to have everything under control in order to start
- Do not trust the skills of others and you want to do everything
- You’ve been planning your business idea for months
- You are waiting for the perfect moment to execute.
The vast majority have lived it: we want everything to go perfectly to start and be successful, do you know what that is? Wasting time, money and opportunities.
It will never be the right time, the stars will never line up so you can execute your idea. If you let this take over you, you will spend it thinking and waiting, letting unique opportunities pass by and letting time grow old, which is the only thing you really have today in the present.
Start today It does not matter how mature your business idea is. What’s more, in a few months or years you will look back and feel ashamed of your product today. That’s fine, that indicates you started on time.
Remember that the key word in entrepreneurship is not to dream, it is to execute.
8. Endeudandote to buy machinery
You have not started to invoice and you are already thinking about looking for money, that you do not have, to buy machinery that you do not need.
Machines without sales only serve one thing: depreciate.
Unfortunately, we also think that because we have a company with the latest machinery and equipment, we are growing, when in reality the cash register barely moves to cover the interests of that unnecessary loan.
Practice the following rule: Unless it is strictly necessary to use a machinery to start producing your business, and this increases your level of sales, you can get into debt to do so.
If this is the case, find out if there is an alternative to negotiate with your supplier to pay for your products, try that the interest rate is not very high and finally that a large part of your income is not destined to cover an expensive debt.
9. Pay to advertise on media that you can not measure
What good is it to promote your business for hundreds of dollars in places that you can not measure the impact of your campaign?
Specifically, I refer to the so-called advertising that accounts on Instagram offers. What do I mean?
It’s very simple when you pay for a business image to post, it’s an Instagram account with 2 million followers, and what you’re looking for is to reach your ideal customers, you’re practically throwing your money away.
Why? You will find the answer to the following question:
If you took the trouble to define an ideal client, with certain characteristics and consumption habits, why would you pay for it to reach hundreds of people you do not know, who do not know how they are, who have no idea where they come from or if would they consume your product, and worse yet, that you do not know if they are people or not?
That’s what I mean, advertising has an added value when it can be developed in a particular and specific way. That is when you can reach your customer with some unique content and that adds value. None of this you get when you expose your brand a base that you do not know.
However, we must recognize that this will depend on the objectives of your campaign because if you are looking for an exhibition of your brand, and this tactic is part of a global strategy of your brand, this could work.
However, most small businesses do not work with this strategy.
If you want to invest in advertising to reach your potential customers and consequently increase your sales, you can use Facebook, Instagram and Twitter advertising. Additionally, you have Google Adwords, which beyond being economic are quite effective.
10. Finally, buy followers for your social networks
This could be one of the worst mistakes you can make with your business idea. Buying followers not only reflects your need to be recognized, it also reflects the little knowledge you have of social networks and the way they work.
Here is a theory of why this happens:
They have always told you that the more followers and readers you have, the more successful you are. False. It is useless to have a hundred thousand followers in your networks, if they are not involved with your brand, if you do not know them and worse yet if they do not buy your products.
So do not spend unnecessary expenses buying followers that this will not make your cash register move.
Work to build a community that, regardless of size, is true to your brand and your product.
I hope you find this information useful, apply it and share in the comments section what other unnecessary expenses when you create your company you know.
“Yourbigbusines” highly recommended you to read this article: 10 Finance Tips for your small innovative Business