Discourse and Improvisation ON Entrepreneurship And…

October 4, 2006

5 Things You Should Spend Money On When You Start a Business

Filed under: It's just business — dionea @ 4:34 pm

I just ran across
5 Things You Shouldn’t Spend Your Money On When Starting a Business.

In the spirit of Ben’s self-declared Blog About 5 Things Week I’d like to list the 5 things you should spend money on when you start a business.

1. “Sufficient” infrastructure.
Sufficient infrastructure is hard to define, as it’s a continually moving target as your business grows. Get too far ahead of the curve and you’ve spent cash you don’t have. Get too far behind and your ability to run your business or serve your customers can be dangerously compromised. Best is if you can stay a step ahead, which leads me to number two:

2. Switching costs.

Is a product or service provider not fulfilling your needs? Fire sooner, not later, and take any hit in switching costs early on as a lesson learned. Putting off inevitable change always winds up costing far more in the future: you have more invested in a lousy solution, you have less time to switch, and you’re probably in crisis mode as a critical business function is now failing.

3. Bona fide appearance.
Little things can make a huge difference in making you look like a real company. For example, yourcompany@gmail.com implies a hobby, you@yourcompany.com looks more legit. And of course you have an accompanying http://www.yourcompany.com that looks professional, is well designed, and clearly tells me what you do. As the old joke goes, on the Internet no one knows you’re a dog. But you can certainly look like one!

4. Time.
One bit of advice that has stuck with me is “you can do any of it, but you can’t do it all”. As an entrepreneur you have to stretch to wear many hats, but sometimes the stack gets way too high. Figure out which hats can easily be worn by someone else, and buy their time. These hats are frequently things you suck at, or could learn to do — if you just had more time.

5. Money.

Yup, buy money, or at least access rights. The best time to get a line of credit is when you don’t need it. The ability to tap into a 7% home equity loan is far superior to a 21% credit card alternative. You will have cash flow problems, so plan for them.


1 Comment »

  1. […] 5 Things You Should Spend Money On When You Start a Business […]

    Pingback by Check Out These Posts Inspired by Blog About 5 Things Week » Instigator Blog — October 5, 2006 @ 3:11 pm | Reply

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