3 Things Start Ups Should Avoid

It's hard enough to start a business. Getting as much help from those that have been there and have seen what has failed should be a priority. 3 Dead Zones in start ups are a good place to start.

Let's look at a couple of them. Undercapitalization. No kidding? Well...there is a lot more to this than what the article suggests. Just having more money on hand isn't always the solution. One of the biggest problems I notice for start ups is that when they get their hands on the big money to get rolling they do a lot of dumb things with it. They don't thinka bout little purchases that are simply a waste and figure they are treating themselves to something good for the business when in reality they should be shopping around.

Minimizing the expenses of a start up is by far the biggest deal IMO when it comes to using your funding. There are so many ways to lower costs that it isn't even funny. Look at the market today for property. You may be able to lease a spcae for $2000 a month. Maybe. There are probably 100 other spaces that are just as good to run your business out of for SALE that will cost you less than that. Property value is cheap right now. BUY a place. The costs will probably be much less than what yuou would think. We did it wiht our office and found a building that the owner just wanted to get rid of. It even had extra space that we could rent out to someone else, and that alone covered our mortgage every month! We were buying a building on a 15 year mortgage and renting out space in it for more than the cost of the mortgage.

Sure you have to worry about insurance quote, property taxes, etc. with the ownership, but trust me there are deals out there better than renting. People take advantage of you for renting because they know people think "It is supposed to cost that much". Don't fall for it.

Be creative. Don't just do it because it is easy. Think this through a lot. Expenses can easily be controlled if you LOOK FOR WAYS TO DO IT.

The Price of Experience vs. Straight Product Pricing

Business school will tell you quite a few things about costs and pricing. Almost everything you tend to learn in business school is based on some sort of manufacturing idea of a product that only accounts for things such as labor, cost of goods sold, and what you need to charge for the product to be profitable. Of course there is much more to it, but most business owners rarely get that far because they have skipped the entire added benefit of seriosus marketing study.

A sort of manifesto about who you sell t rather than what you sell called Price Isn't Tied to Your Product discusses this very thing. It describes the idea that you aren't selling just products anymore like you could 50 years ago. There are jsut way to many variations of the same kind of products.

Shoes, baby bedding, and most notably coffee, which he uses as an example to describe how paying a lot more for a cup of coffee at Starbucks has nothing to do with how good it is. It's the experience and the people who are willing to buy it.