When making decisions for your startup, you have to take many different factors into consideration. Every choice you make in one area has the potential to take something away from your business in another area. Allocating resources is a delicate balancing act when you're starting out.
When my wife and I started our first business, we often had numerous things we had to accomplish, but only a small amount of money to accomplish those things. That meant having to decide between paying our attorney to review an important business agreement, printing flyers or paying for some online marketing.
We would weigh the importance of each task while looking for other solutions to them all while putting off rent as long as possible. It's tiresome living on an edge like that, but if you can do it, you may be rewarded with a successful business.
For decisions like this during your business' crucial startup stage, there are three crucial factors you have to think about:
Being resourceful means stretching your resources to achieve something that is beyond those resources' intrinsic value. To apply resourcefulness, keep an open mind and look for ways to go beyond obvious solutions. It could be in the form of looking for auctions at recently closed businesses to snap up equipment for low cost or running your business out of your garage until you can afford an office.
When making decisions about what to spend money on, see if you can come up with some alternatives that will allow you to flex your resourcefulness muscle and maybe save some money in the process.
On a personal level, that meant my wife and I starting our first business in our garage and only moving into an office when we had brought in enough revenue to justify the move. Even then, we painstakingly searched for an office that would support our business processes efficiently and have minimum dead space in it. This way, as we grew, we prolonged the need to move to a bigger office.
As you're setting up your business, research some key benchmarks in your given industry that you can not only aim for, but use to measure success along the way. Knowing these benchmarks in your industry will help you with planning everything because you'll have a goal in mind to hit (or, better yet, surpass). You'll at least have a better idea of how to set things up if you want to reach these benchmarks.
Depending on your type of business, the size of your business and the industry you're in, there are many benchmarks you can use for planning like established and published benchmark numbers or guidelines from industry analysts
If that research does not yield any results, then you can put your resourcefulness to use and perform your own primary research on your competition by purchasing products or services from other businesses and studying their processes or their activity levels.
For our business, we decided at first that we wanted to offer the best customer service, so we had people answering phones for up to 16 hours during a day so we could cover the full range of the work day across the entire United States. After doing a little research, we discovered that 10 hours was more than enough to cover the busiest part of the working day throughout the country.
After we cut back on our phone customer service, we beefed up our FAQs on our website and provided people with better online customer service. Admittedly, we should have done the research and planning beforehand, but live and learn (or, more accurately in business, fail and learn).
Since change is constant, the value of maintaining flexibility in all aspects of your business is undeniably important. Ideally, you want to be able to pivot quickly if necessary or shrink and grow your workforce as needed throughout the year.
This can take the shape of renting versus owning or working with freelancers versus hiring. Look for alternatives to permanent solutions so you can maintain your flexibility when you're starting out.
In our company, we purposely avoided investing in developing exclusive production molds for some of our products. This cost us some rights and exclusivity for products, but in the end it worked out in our favor.
Because the industry we were in changes rapidly, giving up these rights and exclusivity didn't matter because we were able to switch out those products for better selling ones with minimal hassle. Had we invested in exclusive production molds, we would have spent so much money on them that it would have been difficult to walk away from them.
When making decisions for your startup, always keep resourcefulness, planning and flexibility in mind. They'll make all your business decisions much easier.