The Australian Small Business Blog

Monday, March 29, 2010

Start-Ups: Are You Serious?

As a business coach I get approached by lots of people who are thinking of starting a business, or who have just started. There is one thing in common with all start-ups: they either don’t have much money, or don’t want to spend any. This is understandable. They don’t know whether the business will actually work, and how much time and resources they will devote to it.

So the start-up tries to save money by printing business cards on their home inkjet printer using pre-perforated cards from Office-works. They have a hotmail email account, or maybe their home Bigpond account- only marginally better. Their only phone number is either a mobile, or a home phone number that goes to an answering machine when they are not there. The address is a home address or a PO Box.

All these cost saving attempts scream AMATEUR!

It is not just about the money, it is also about the time. So people may try to start a business while holding down a fulltime job. How do you do that? Make calls from your office in the boss’ time- what might potential clients think when your ringing phone is answered by reception, or worse, picked up by your boss because you are not at your desk? Are you only able to meet your clients during lunch-time or after work?

This just informs your potential clients that you are so lacking in confidence in your business’ survival that you are keeping up your day job. Would you want to do business with someone like that?

Although it is hard starting up, you have to convince people you are serious. That you have made the commitment to make your business a success. This means being available to talk and meet with clients at times that suit them, and to invest in your business infrastructure.

In a new business you can expect to spend $10,000 in the first year in the establishment of your business infrastructure. You don’t need to spend this all up front, but there are things you should invest in as early as possible such as:

• Professionally produced business cards and stationery
• A proper email address based on your business name
• A basic website
• Simple advice for start-ups from both an accountant and a coach

So dedicate the time and create a budget of a third of your expected annual spend to make your business look professional and build your own confidence right from the start as you make those first scary steps into your marketplace.

The very fact that you invest your time and money in your new business will increase your commitment to the success of your business. Your potential clients will see this, and be far more confident in dealing with you and be prepared to become one of your first clients.

None of this need to cost a lot of money, but you must be prepared to make these investments, or else no-one will take you seriously and like many business intenders, you will learn the hard way, intentions are not enough.

May Your Business Be - As You Plan It.

Over to You. What do You Think? Post Your Comments Below.
Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success.

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Anonymous said...

I see it all the time people get a shop front and stock in but there is no money left for marketing so people who are in the mind set of buying their product who happen to stumble upon the shop and notice the product in the window (no money for signage) are their only customers is it any wonder that a lot of people like this go broke

Fiona Bosticky said...

This is so true. I have found this to be the case as well, when I meet people starting a new home or small business.

The first thing they need to understand, that it's all about perception, and looking bigger than you are.

You MUST set aside even a small budget for LOOKING right - cards, website, etc...

If you're going to take the step, it needs to be a big one, done correctly, and in the right direction. :)

Girish Bellalcheru said...

spot on, it shows the amount of commitment the owners have to their business. But being down the road myself I would also caution people to find a balance on how much you want to spend on image/identity and the initial startup costs versus what goes into actual product/service offering. And using your day job facilities is probably the biggest mistake you could do for both sides of life.

Unknown said...

I couldn't agree more, these amateur mistakes happen to a ton of business and they really hurt the credibility of the company. A website, voicemail, and good e-mail are all great thoughts as well. You only get one first impression.

peter said...

My Gran used to say 'You can't put an old head on young shoulders' by this she meant, of course, is that with experience comes wisdom.

No one could disagree with your comments Greg, but there are a lot of start ups that really do not have the budget to do it all right and often things like email addresses and business cards are unecessary necessities in their mind because their product is much more important.

Do we knock these businesses out of the water just because they are inexperienced and lack the wisdom to get it right?

On the other hand I have seen people uneccessarily spend hundreds of dollars on their 'image' and to no avail because what they wanted to sell was unsuitable.

Then you get the problem of changing address or details (or just want to change the image) and you have to toss hundreds of dollars in the bin and start again.

Let's not be too harsh on the mistakes that these beginners make. Sure, encourage them to get it right, but be mindful of the costs and the inevitable changes a 'newbie' business is likely to make. There is no saving in costs when we print 1000 business cards instead of 250 when something changes and we have to re-print.

John said...

Much of these costs need not be expensive. Domain-branded email can be had for free (assuming you already have a domain name) using Google Apps for Business, and small print runs of (very high quality) business cards can be gotten through sites like Outsourcing the basic design of a website through one of the freelancing sites need only cost a few hundred dollars too. It doesn't take a lot of $$ to get these 'first impressions' right, if you know where to look.

I'm starting a business helping small business get started. Not your area of expertise, Greg, but more on this other stuff...getting the infrastructure, back-ends and image etc established for the lowest cost.

Great site, by the way. Only found it this evening but will frequent it regularly. Cheers.

Jess Ricardo said...

Thank you for the article. I found myself in a situation where I invested a lot of money in a product but came up short when it came to promotion. I quess I thought all you need is awesome product and clients will come to you. I was wrong and now pay the price...


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