Making money is high on many people’s agenda. It is hard to find any situation which is improved by being broke so earning enough to provide a decent life is something that occupies much of most peoples day and starting a business of ones own is something to which many aspire.
Business is essentially simple, you have to sell something for more than you buy it for, with the profit being yours to spend in any way you see fit.
Of course lots of things get in the way of this including, marketing, advertising, paying employees, tax, vat, paying an accountant to keep your records, possible legal bills, debt collection costs when someone doesn’t pay, travel so on & so on.
Many people starting out in business assume that they must have a better car to impress customers or clients, and operate from posh offices. This however is usually not true. Most potential customers are more interested in what you can do for them than whether you drive a BMW or have a Mayfair address. Of course you should always look professional and act properly but the essence of your operation will come through in the way you present yourself, and if you are genuine it will show regardless of whether you are wearing Gucci shoes or not.
Overheads kill many start ups before they get going. I always tell new business owners to concentrate on keeping their fixed overheads low. By fixed, I mean any overhead cost that you cannot get out of within three months. This doesn’t apply to established businesses quite so much so here I am referring to fledglings. If you must take an office insist on monthly contracts and do not get seduced into committing to three years or more. Better to pay a bit more for the flexibility of being able to get out of paying the rent should your business get into trouble. Do not sign personal guarantees, if you’re asked to sign one, find another supplier for that service. Stick with your old banger or use public transport rather than taking on a car lease. If your old banger breaks down you can decide when to fix it subject to cash availability. Leasing companies want paying every month whether you have the money or not and failure to pay could affect your credit rating and therefore your ability to expand your business later.
Remember that using public transport to get to business meetings is fully tax deductible whereas the full running costs of a car are not. In London, public transport is very reliable so why bother with a car. Buy yourself a nice looking business case with wheels to carry your stuff around. it saves your shoulders in the long run. Your customer or client will not see your spanking new BMW anyway as it will be deep in the vaults of a car park somewhere or awaiting collection from the pound! Keep all your receipts and make a note of what the journey was about so that your records are complete. If you have a meeting in Manchester & are based in Reading use the train but try to arrange your meeting to coincide with off peak travel so that you avoid additional costs. Try to avoid meeting at lunchtimes or over dinner as you may end up with the bill! better late morning or mid to late afternoon which will allow you to have a coffee or two with your customer or even a glass of wine but avoid the £100 lunch or dinner. Remember in the early stage of building a business that a penny saved is a penny made and the accumulated pennies can go toward business expansion.