profitable

Longtime readers of my books and blogs know that you don’t have to spend a lot of money for a lot of business start ups.  This is especially true in the Financial Depression that we are in right now.

Another reason that I get so much mail is because search engines only work if you know the write phrases or questions to ask.  Without learning how to think critically a lot of people get stumped or swept into the “me too” posts that confirm that spending money is the only way to get started with a business and the crazy thinking that goes along with that.

Don’t get started in crazy thinking when it comes to getting your business going.  You want to make sure that your costs are low unless you are anticipating (and think that part through really clearly) making buckets of cash in your second year.  Depending on your type of business, that may work out for you.  Then again, you really should be careful in this economy with whatever it is you are doing or planning on doing.

Readers write in and are always asking me to help them save money and I end up reminding them that that most business people (or at least the ones I’ve dealt with their taxes) spend too much money on things that don’t need for their business.

Let me give you an example from back when I was starting up my comic book delivery business. I had saved money and was ready to buy a cash register for a swap meet, a credit card acceptance machine and the wiring for it, stock up an inventory of every comic book, poster and pog I could think of. After calming down and realizing that I would go broke in trying to get everything – not to mention to pay monthly fees for the credit card processing service AND a service charge for each transaction, I settled on the following:

1. Preorder of comic books of about $600 of merchandise, trading cards and posters at the retail level so my initial cost with a 50% discount (if it was that high) would be $300.
2. Licenses for selling comic books and working swap meets (my initial source of looking for clients who wanted me to deliver comic books to) – free.
3. Site fees to set up at each week at either Pierce College or the old Winnetka Drive-In swap meets – $10-20 a week for a table so in a month maybe $80.
4. A cash register – $250.

I mentioned this to a family friend and he said, “Why do you need a cash register? What’s wrong with a metal box or even a cigar box?”

He was right! I ended up saving another $250 which I could turn into trading cards which I ended up selling.

I ended up getting clients from the swap meets. Unlike a lot of other people who had jumped into the comic book business to make money, I did not go broke from over-spending with my start-up costs.

In your business, do you really need a plush office?  You may have already had to move to a home office because you can’t afford to pay for an external office anymore.   Is image important to what you are selling? If you are an attorney or in marketing, you might need something for potential clients to see that you are serious. You don’t have to go overboard like some Century City attorneys use to and have marble flown in from Italy and placed in your building!  A lot of attorneys are working from home so that they aren’t spending money that they don’t have and need to borrow to make ends meet.  Not such a bad idea these days, huh?

Think of ways to start up or continue your business that don’t cost money. Be creative. There are plenty of one dollar, 99 cents and inexpensive stores where you can find goods to fill the gap that expensive stores sell. A lot of times the products are the same and you are just paying more for the name recognition from buying it from that particular store.  Lots of people are finding joy in generics these days and if something is generic and works for your business your customers don’t need to know that you aren’t using the “name brand” that they might be expecting.  Let’s face it though, people would probably respect you more if you do business showing that you are saving money and not blowing cash on labels for clothes that don’t matter if you are running a car wash or discount shoe sales business.

Little things like that may sound cheap but if you are starting up from scratch, trying to take care of a family of four, have a special needs daughter or any or all of the above, you want to make every penny count. It will pay off down the line as well because other business people will respect you for watching your money. Potential investors will see that you can be trusted with money and won’t blow it all for things that won’t help your business.  If you can find people with cash to invest in your business these days they are worth their weight in gold.  Don’t kid yourself, there is plenty of investment money – it is just on the sidelines waiting to see where they should put it.

One last point. Nothing beats natural “word of mouth” advertising. The internet allows people to voice their opinion and tell you about goods and services. Sometimes some of the feedback systems can be manipulated but if you read between the lines, take the time to e-mail people or just ask your friends, you will see that honesty in business is rewarded with repeat business!

If you make a good product or offer a good service, people will come back (if they have the money). Not only is it a great and profitable idea (like the great and powerful Oz?), it will happen without you spending a cent (or euro, etc)!

For something that costs more than free, please check out one of my books from my site! 

And before I forget – Happy Birthday, Edy!

June 18 2009

Kim Isaac Greenblatt

Keep Depression Start Up Costs Low

Tags: Business, Depression start-ups, money

This entry was posted on Thursday, June 18th, 2009 at 12:09 am and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.