Many budding entrepreneurs make one crucial mistake when they see the startup costs mount for their new venture: They take shortcuts. This is the worst thing you could do, so avoid it at all costs – pun intended. Yes, the estimate you carefully calculated to start your new business is going to be too low, no matter what. There are always unanticipated expenses. This doesn’t mean you can afford to do things halfway, however. Pending certain things could result in financial loss later.
1. Insurance
If you believe you can save on business insurance by not getting any at all, think again. You can get the insurance coverage you need at reasonable rates if you shop around, and it’s more important to insure your venture than it is to boost operating costs with a cross-off of this budget line item. Nothing will shutter your doors and windows more quickly than an uninsured incident, so don’t try to save money here. Talk with an expert about the coverage you need and secure a policy. Seriously. Can you afford to pay for damages if a customer slips and falls on your first day open?
2. Safety
Safety is a natural segue from the above. No matter what you do, there are safety protocols that must be met. Your best source for information about workplace safety is OSHA, or the Occupational Safety and Health Administration. Certain industries are bound by OSHA safety requirements, so make certain your business is and remains in compliance with all regulations pertinent to you. You may also have to comply with local, county, and state safety regulations, so check with all authorities to ensure you don’t get an unwanted official visit and costly slap on the wrist.
3. Personnel
The above two also apply to this shortcut you should never take. If you have employees, depending on state law, you must carry workers’ compensation insurance and conduct OSHA training; otherwise, you face costly litigation is someone gets hurt on the job and/or stiff fines. If you don’t have employees but find yourself working 24/7/365, it’s time to hire a few people. Your dream business isn’t worth sending yourself to the emergency room. You need to maintain a work/life balance, and you also need to ensure your employees have a work/life balance, too.
4. Marketing
If you don’t get the word out about your new venture effectively, you’ll hear crickets on opening day. A comprehensive offline and online marketing plan that shouts your new business to the rooftops is crucial to your initial success. Statistics show that 30 percent of new businesses fail within their first two years, so you need to spend money on effective advertising, and this definitely includes a digital marketing plan. If the acronym SEO is Swahili to you and you think backlinks require a backhoe, it’s time to invest in some expert marketing help.
5. Licensing
Finally, never open your business without securing any required licensing and bonding. What you do will dictate what you need. If you are going into a contractor field, you will likely need a surety bond, proper licensing for your specialty, and insurance. If you are opening a salon, aside from your licensing, you may need a business license and proper insurance. Take the time to research your field and discuss with local and state licensing authorities your specific requirements. Then, get what you need. Don’t put it off. It isn’t that expensive and you’ll be fined or shut down if you are unlicensed.
You and your business will succeed, but some of your success will be contingent on getting what you need from the start. Yes, it’s tempting to take shortcuts when cash is tight, but it’s better to seek alternative funding than take chances.
