If entrepreneurs could recover all the time and money they waste, our GNP would soar. I can’t prove that scientifically-researching the topic would be well, a waste of time and money-but I’ve seen often enough in business plans on income statements (including my own), during bankruptcy proceeding an just looking around.
To win the startup game, you need to be a miser with your money. You need to spend in on things that will simply make you feel or look like one. You need to pander to what your customers need, not to what you need.
So before you sign that check, swipe that credit card or sign that contract, ask yourself, “Will this bring me business?”
If the answer is no, consider it one less rupee you need to beg borrow or spend. Based on my experience, here are 10 of the most common ways entrepreneurs waste money:
1. CUSTOM LOGOS, FANCY LETTER-HEADS AND OTHER ICONS OF SUCCESS
They may make you feel like an entrepreneur, but they don’t bring home the bacon. Instead, design your own with one of the many templates that come packaged with your word processing software. They include matching business cards, letterheads, enveloped an invoice. You can find templates in the Project Gallery of Microsoft Word or the Template Chooser in Apple’s Pages. If you need more choice, HP.com and Avery.com offer free templates for use with their specialty forms and paper.
2. FANCY OFFICES
Speaking of bacon, maybe the dining room isn’t the ideal office, but working there bats not eating. If you don’t need a formal office, don’t pay for one.
3. A COMPANY CAR
The latest luxury car doesn’t make you a better businessperson, it makes you a poorer one. If the wheels you already have get you back and forth to the grocery store, new ones are a waste of money. Just be sure to log your business travel so you can deduct the usage.
4. A SLICKER-THAN-YOU CAN AFFORD WEBSITE
Brochure sign, ad, etc. In the beginning good enough is often good enough.
Sorry to say, many of them will borrow your watch to tell you what time it is. If it’s not rocket science, figure it out for yourself.
6. FALLING FOR THE PITCH
“You’ll be getting in on the ground floor.” You’re not in a position to be someone else’s venture capital. If a rep for a new advertising outlet gives you the hard sell about how wonderful it’s going to be, invite them to call you back when they can prove it. Leave the experimenting to others.
7. STARTING A BUSINESS BECAUSE YOUR FRIENDS LOVE YOUR IDEA
It’s one thing to like or even love an idea-it’s an altogether different thing to be willing to plunk down money for it. There’s no substitute for test marketing where real money changes hands.
8. BASING YOUR MARKETING STRATEGY ON WHAT YOU THINKS IS WONDERFUL
Good chance your customers are nothing like you (or them you). Instead, research your market thoroughly. What do they read? What do they watch on television? Then craft your message based on what actually appeals to them, not you.
9. UNDERESTIMATING THE COMPETITION
Or worse, thinking you don’t have any. Any business plan that proudly states it has no competition earns itself an immediate place in round file. If you don’t understand your direct and indirect competition, you don’t understand your market. And if you don’t understand your market, you may be trying harder to get better at something you shouldn’t be doing at all.
10. THINKING THAT YOUR PRODUCTS OR SERVICE IS WHAT SELLS
Here’s the sad truth: a great marketing strategy beats a great product every time. Business owners can (and will) go on and on about their wonderful products or services. The successful ones spend their time scheming about how’s going to buy it and how they’re going to buy it and how they’re going to reach them. Products don’t sell, marketing does.
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