It’s true; you don’t always need tens (or hundreds) of thousands of dollars to start a business. In fact, there are many business models that can be started for next to nothing.
Many service oriented business models – think coaching, consulting, training require very little investment aside of branding, corporate stationery, a computer, smartphone and mode of transport, right? Wrong.
There are always costs, and for the unwary entrepreneur, these costs can be sneaky little predators that lurk about in dark corners just waiting to swing the unwary and excitable entrepreneur by the bootstraps. Think GST payments, taxes, superannuation, costs of your sales, unexpected repairs, licencing fees, domain hosting to name a few.
The point is, when you are bootstrapping, you are always just a few bucks away from wipe out. Herein lies another set of hidden costs. Costs that any would be ‘boot strapper’ must know about before plunging into the murky depths of a new enterprise.
What are these costs you may ask?
1. YOUR ENERGY LEVELS AND HEALTH.
If you don’t have enough money to give your business a strong start the resource that needs to work the hardest is you. This may be wonderful in the early days when you are still excited about what you’re doing, but when as the bills start to pile in and you start to drag your heels, it’s not so much fun.
2. YOUR FRIENDSHIPS.
You may be tempted to draw upon friendships for help. I’m sure you have a mate that provides some service that is valuable to your business. Imagine how strong that friendship will be if you aren’t able to pay for their services, or if you ask for one too many favours.
3. YOUR FAMILY.
Is your family relying on you to bring home the bread? Imagine how much fun it’s ‘not’ going to be to miss out on paying the family phone account, school excursions or birthdays. Imagine bringing kids up with the mantra ‘we can’t afford it’.
4. YOUR CUSTOMERS.
Want to build a recognised and loved brand? You need to stick around long enough to do it. Word of mouth is an incredibly effective promotional tool; you want it to be stories of customer satisfaction, not undelivered services, unmet promises and disappointment.
5. YOUR REPUTATION.
Closely linked to the above-mentioned point, but this is where it gets personal. Failing to deliver doesn’t only affect your business, it also affects you personally. Do you really want to be ‘that guy or gal’? Despite the best intentions, mud sticks and humans love to find another human to blame.
So, before you leap in, consider giving yourself a head start with just a little bit of capital to kick things off. You’ll really thank yourself down the track.
Originally published by Kerry Grace on www.smallville.com.au