Self-Devpt. Nuggets™

Believing you need to have your own office/staff from the start could be a BIG mistake.

With only a few exceptions, most businesses can be prudently started up on a small budget, in a way that would increase their changes of achieving long term success.

The problem seems however to be that certain individuals come into self-employment with faulty preconceived ideas about how they should start.

Many times, they will ignore readily available wisdom on offer from a myriad of sources to devote scarce financial resources to creating a lavish image for their new business.

By the time they realise that the business is struggling to earn needed income at a rate that will allow quick enough recovery of expended capital to cover cash flow requirements, it would be too late.

This article provides common sense justifications for starting small and offers examples drawn from real-life occurrences and personal experiences of entrepreneurs who have achieved success by following a similar route.

A Home Office Will Usually Do(At Least For A Start)

In many cases, nothing could be further from the truth than the assertion many people make, that one needs an office to operate from when starting-up. In my early startup days, many times after people had excitedly engaged me in discussion about my work, they would ask me – “Where is your office?”. My prepared answer was always I work from home. A lot of individuals as soon as they heard this, simply got turned off and never got back to me. As far as they were concerned, if I did not have an office, I could not be a serious business person!

From the time I started my business, I had promised myself – based on a detailed analysis of the nature of products and services I aimed to deliver – that I wasn’t going to spend ANY money on an office space – talk less of staff. I believe that my conviction has now proved to be well based. I say this after extensive reflection, over more than four years. It is obvious that it was not my lack of an office that prevented me from doing more business than I have done! People who wanted me called me up, sent me e-mails, came looking for me at my SOHO (Small Office Home Office) – including the Center for Management Development!

What Really Matters Is That You Have A Product/Service That People Want

The fact is that if you have a product or a service that people really want and need, they will find a way to get to you and pay good money to get it! Find the right price for your product or service that you offer, and then make yourself accessible – either by going to the customers or strategically locating yourself where they can get to you.

So this issue of having an office for your business to start-up, as far as Im concerned, is just a joke. For most types of businesses, having an office will not guarantee that you will get taken any more seriously than if you do not have one. If anything, it would add to your overheads in so many ways, as one additional, related expense or the other would creep in over time.

As a matter of fact, a seasoned entrepreneur and highly successful Independent Consultant Herman Holtz once wrote – in his book “The Concise Guide To Becoming An Independent Consultant”(John Wiley and Sons, Inc, 1999 – that even his big corporate clients expressed approval of his efforts to keep his overheads low when they visited his home based office!

Having said the foregoing, I must not fail to add that the corporate clients referred to in Holtz’s case belong to a culture in which clients predominantly look for professionals who can deliver results and not those who devote needless time and money to creating an excessively impressive appearance. In the environment where I have had to operate as an entrepreneur, the “thinking” of clients or prospects very often is radically different and you will find yourself getting penalised by way of rejection simply because your office does not look “flashy” enough – or worse, you use a home office!

Achievement Of Long Term Success Will Often Depend On A Startup Entrepreneurs Financial Intelligence And Frugality

Despite the foregoing, I still believe people who keep looking for start-up entrepreneurs with flashy cars, tastefully furnished office spaces etc before they patronize them will probably end up engaging incompetent persons who cover their lack of proficiency with lavish expense on office space. Very few REAL and financially intelligent entrepreneurs will go investing that heavily in overheads-generating items before theyve been able to make good money to show decent profitability. Many of those who tried to do so in the past, do not have good tales to tell today.

Ill give a quick example. I know someone who started her business by getting an office space, furnishing it tastefully, putting in phones, air-conditioning etc. Then she recruited an assistant, a secretary and an office boy. After everything was set, they began looking for business. Letters were sent out, meetings held, follow-up calls made etc. Unfortunately, not a single account was secured. Six months passed and this lady had been paying her staff salaries even though no business had been coming in. Power outages repeatedly ate into her rapidly depleting funds as fuel had to be bought for the generator.

Then there was the issue of the personal expenses she was incurring on her side – domestically. She had a housekeeper and a cook who also needed to be paid! To cut the long story short, she got to a point when she could no longer pay her staff on time – both in the office and on the home front. This led to repeat instances of friction between her and them. Some sudden resignations happened, but she (stubbornly) replaced the deserters with others (who would accept less pay than those before them). Eventually, she had to give it up.

Theres NOTHING Wrong With Starting Humbly – In A Home Office OR On A Kitchen Table!

The lesson here is quite obvious. You need to hold on to as much of your money as you can in those start-up days/months. Most entrepreneurs will find that they can combine many of the jobs for which others choose to recruit staff quite effectively. We have heard the stories of how many successful people started their businesses on their kitchen tables. It only makes good common sense to do this. When youre more able, you can gradually add to your numbers – but at the early stages, start small and conserve your resources as much as possible. You have been warned!

Read my article titled Practical Guiding Philosophies For Entrepreneurial Success, in which I explain (under the subheading “Procrastinate When It Comes To Spending”), why when you want to do any heavy businessrelated spending, you may need to stay off doing it for at least another 24 48 hours, or for as long as reasonably possible – till you’re convinced it is inevitable.