Home Business Growth On A Shoestring Budget
By Dock Murphy
There are two cardinal mistakes small home based business entrepreneurs make -
two mistakes that usually cost them not only their businesses but in some cases may
have additional financial ramifications from which it will take years or even decades
to recover!
The first mistake is the premature purchase of high end equipment, materials,
supplies, and shop or office space. The second mistake is the attempt to prematurely
grow the business and let it soar.
Either of these mistakes can be extremely costly to your business. Financially it can be
very devastating and this is something you can avoid if you plan ahead.
As odd as it may sound, but premature growth and high end equipment have rung
the death knell for more than just one promising business! Consider the first problem:
the expenditure of funds for items not yet needed.
If you are starting out as a baker, for example, you need an oven. Until you have a lot
of business, a small oven will do fine; sure, you may have to spend a bit of extra time
baking and moving different dough and pastries in and out of it, but for the time
being, you will be able to make do.
As your business grows, you will take in enough money from your profits to buy that
bigger oven you need. Next, when your business continues to grow, you now have
the funds necessary 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 out spending money they have not
yet earned on buying the biggest oven possible. Going into debt – in some cases
making questionable financial decisions with respect to credit cards and second
mortgages – will mark the beginning of the consistent potential for financial ruin.
Failure to grow equipment gradually in keeping with the business is at the root for a
high likelihood of fiscal ruin.
The second mistake is a bad as the first: trying to make the business fly before it can
crawl. A business needs time to catch on and build a solid base of repeat clientèle.
Sure, you may get the windfall of that big client that spends more money than half
your small clients put together, but if that contract is taken from you tomorrow and
you do not have your well developed base to fall back on, the odds are good that
financially you will not be able to sustain your business.
Home business growth on a shoestring budget is always gradual and deliberate,
appealing to a small niche rather than chasing a mass market appeal. In this manner
the business will weather economic downturns, the loss of larger clients and in some
cases also the need for the replacement of durable equipment. Failure to heed this
advice may leave you with a second mortgage, unpaid bills, repossessed equipment,
and in some cases even the need for bankruptcy protection.
About the author: Dock J. Murphy is owner of Plug in Profit and writes on a variety on a
variety of subjects. Visit: Plug in Profit.
By Dock Murphy
There are two cardinal mistakes small home based business entrepreneurs make -
two mistakes that usually cost them not only their businesses but in some cases may
have additional financial ramifications from which it will take years or even decades
to recover!
The first mistake is the premature purchase of high end equipment, materials,
supplies, and shop or office space. The second mistake is the attempt to prematurely
grow the business and let it soar.
Either of these mistakes can be extremely costly to your business. Financially it can be
very devastating and this is something you can avoid if you plan ahead.
As odd as it may sound, but premature growth and high end equipment have rung
the death knell for more than just one promising business! Consider the first problem:
the expenditure of funds for items not yet needed.
If you are starting out as a baker, for example, you need an oven. Until you have a lot
of business, a small oven will do fine; sure, you may have to spend a bit of extra time
baking and moving different dough and pastries in and out of it, but for the time
being, you will be able to make do.
As your business grows, you will take in enough money from your profits to buy that
bigger oven you need. Next, when your business continues to grow, you now have
the funds necessary 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 out spending money they have not
yet earned on buying the biggest oven possible. Going into debt – in some cases
making questionable financial decisions with respect to credit cards and second
mortgages – will mark the beginning of the consistent potential for financial ruin.
Failure to grow equipment gradually in keeping with the business is at the root for a
high likelihood of fiscal ruin.
The second mistake is a bad as the first: trying to make the business fly before it can
crawl. A business needs time to catch on and build a solid base of repeat clientèle.
Sure, you may get the windfall of that big client that spends more money than half
your small clients put together, but if that contract is taken from you tomorrow and
you do not have your well developed base to fall back on, the odds are good that
financially you will not be able to sustain your business.
Home business growth on a shoestring budget is always gradual and deliberate,
appealing to a small niche rather than chasing a mass market appeal. In this manner
the business will weather economic downturns, the loss of larger clients and in some
cases also the need for the replacement of durable equipment. Failure to heed this
advice may leave you with a second mortgage, unpaid bills, repossessed equipment,
and in some cases even the need for bankruptcy protection.
About the author: Dock J. Murphy is owner of Plug in Profit and writes on a variety on a
variety of subjects. Visit: Plug in Profit.
| Home Office Weekly Your guide to successfully living & working under one roof! Subscribe Today! Click Here! |
| home | business tips| office space | time tips| home life|inspiration |art|books|tools|site map|about us |
Home Office Weekly is a BackPorch Publishing site Click Here to Get Your FREE SUBSCRIPTION Today! Marcia Passos Duffy, Publisher & Editor Author of Be Your Own Boss 301 Moved Permanently |