Beware, entrepreneurs: there are seven easy ways to waste your hard-earned capital. And although that company car sitting in the garage and custom logo atop your fancy letterhead may tickle your fancy, these, and many other temptations, are just a waste of your capital. We have established the top seven ways that entrepreneurs waste their money. Avoid these seven temptations, and you and your company will have a greater chance of financial success.
Temptation #1: Icons of Success
Custom logos and fancy letterheads may make you feel like a successful entrepreneur, but, in the short-term, they make you lose money. As a small business owner, it is important to design your own logo with templates provided in a word processing software (Project Gallery of Microsoft Word, Template Chooser in Apple's Pages, etc.). When designing your own using a free template, you can also receive matching business cards, envelopes, invoices, and letterheads.
Temptation #2: The Company Car
Kate Lister, a former banker, small business investor, and veteran entrepreneur argues that "the latest luxury car doesn't make you a better businessperson, it makes you a poorer one." She couldn't be more correct. Most of the time, entrepreneurs need a car to get them to and from the office. If the car gets you to where you want to go, it may be all you need, XM radio and 24-inch rims aside.
Temptation #3: The Sweet Suite
Fancy offices are expensive, and for startup entrepreneurs, a huge waste of money. If your business is still growing, you may want to work from home and forgo leasing out an office space until your business matures. Today, many entrepreneurs are utilizing business incubators instead of renting out their own space. This is another smart solution to wasting money on an office suite. A smart rule of thumb is if you don't need a formal office, don't pay for one.
Temptation #4: Slick Advertisements
Marketing your business is important, but advertising out of your price range is a no-no. When your website, brochures, signs, advertisements, billboards, pamphlets, and commercials are more expensive than you may have anticipated, you have wasted your money. In the beginning, good enough is good enough.
Temptation #5: Friendly Consultants
Consultants do provide a sense of security for entrepreneurs. However, if you can do the math yourself, it is not worth hiring a consultant to do it for you.
Temptation #6: Employing Friends
Surrounding yourself with the people you love is one thing, but employing your best friends to run your business is another. Although employing friends and family is an option, it is not always the best. When an entrepreneur hires a family member who isn't as experienced in the industry as he or she should be, trouble ensues. Not only is the entrepreneur wasting money by paying that particular employee, but more confrontation will happen within the workplace. This could lead to a more-than awkward lay off!
Temptation #7: Brand New Technology
Of course you want your business to have the best technologies out there. Unfortunately, many entrepreneurs buy the fanciest and newest technologies without conducting proper research. Sometimes, new isn't better. Before purchasing any new electronics, be sure to research if it's easy to use and right for your company's technological purposes.
Avoid these seven deadly temptations and you will be well on your way to making more money within your new start-up business!