Expand your range of vision
Seriously underestimating your startup costs is a common mistake among entrepreneurs. They may focus on big-picture costs, such as building rentals or vehicle prices, only to neglect lesser expenses such as utility bills, staff salaries, or software subscriptions. And they almost always underestimate what kind of marketing investment is necessary to build awareness and create a demand for the product.
It is also important to address risk. Many entrepreneurs are so focused on their business idea that they fail to consider potential risks that could come between them and their dreams, much less think through how they will cope with those risks, should they arise. You must not become obsessed with what could go wrong. But you cannot be afraid to analyze the risks and threats you face from competitors, economic factors, natural disasters or the elements, or even from the inevitable mistakes and missteps that every business person makes. If you are beginning a luxury goods business, a downturn in the economy is a serious risk to you.
Do you have a good liability insurance policy? If an accident occurs in the third or fourth year of your business, perhaps you can absorb the loss and carry on. Should you take such a blow as a startup and find that your insurance policy does not cover the damage, you may very well find yourself without any business at all.
Create a frugal culture
Let us assume you have organized yourself well and have gathered all the resources and followed all the steps required to launch your new business. Your trustworthy accountant and attorney have reviewed your plans and contracts. You have secured the permits and insurance policies. You are filled with excitement and are ready to go. As you start to realize success, it is imperative to keep the following advice, which combines the big-picture vision of the wide-angle lens with the detail focus of the microscope.
No matter how extensive your resources, there must always be a budget, and someone has to be appointed to manage within that budget. If you are the founder, it is up to you to be the primary budget-minder. You should research the cost of every product and service you plan to utilize. Such frugality should become deeply embedded in the culture of your company. It is not about being cheap but about being frugal. If you stay frugal when you run your business, your chances of success will be much stronger.