Running a Business Requires a Budget

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Stop trying to convince yourself or anyone else that you can run a business without a budget. I am still running across ecommerce sites claiming they can't pay for services because they are start-ups.

Business costs cash to work and grow, or lines of credit if available. Initially, you may have access to resources that make the job easier. Magazines have been started with college interns, Kinkos for presentation and pasted up dummies to present to advertisers.

Ecommerce became a buzz word around the time of 911. Somewhere, somehow the word was spread that all you needed to start a business was a web site. If you already had a Net hookup and taught yourself web design, then you are on your way. The proper retort to that statement is: well, maybe.

We also have to consider Microsoft's beginnings along with Apple and others of their time. Many read the story and think, if someone else can do it so can I. The aforementioned examples are the exception to the rule. These startups, along with similar ones, had products the world seemingly had been waiting for. They had the product and the timing. They also had more than the usual dose of luck.

Ok, maybe you have your site up. You have learned how to use a digital camera and you are showing off handmade items you and your friends make as a hobby. Ok, let's stop here. Even if you manage to pass around business cards and chat this up enough so that you start getting orders, then what. It's all fine and good when the items are sitting on your kitchen table - they have to be shipped. Who is going to do the packaging, the record keeping and the shipping? All of this costs money. Your family members are eventually going to tire of staying up all night doing these tasks.

After your initial inventory is gone, what now? Your friends are going to tire of working around the clock for additional orders. You will need a Plan B for additional production. There are hobbyists that wouldn't mind making some extra dough. However, this requires a budget.

There are others who think they can start a magazine or a newsletter without money because they only view it as 'something' they are going to post on the Net. Things don't go well unless you can pay the writers to produce and pay for marketing to get traffic coming to your site. We all know about Google ads, but they don't do you any good unless you have a good number of daily visitors. It's takes, patience and yes, money to make that happen.

Time and again alleged publication entrepreneurs solicit writers telling them they are a start-up so they can't pay. This should never be the writers' problem. It is unethical to ask someone else to take on your problems. If you want someone to produce anything for free, then you offer them a percentage of your business once it is up and running.

There is, however, nothing wrong with the concept of having a test run. Sell a small mix of products and you then have the numbers to prove to potential investors that you have a waiting market.

Another misconception that the Net seems to have sprouted: you get a great idea and folks are going to come running ready to buy. The field of dreams concept works only in baseball. You cannot sell or advertise an idea unless you are another one of the thousands of scam artists using the Net.

Make a plan. Try a test run if you have the resources. Then expand your business plan and start shopping it around. I attended a session of SCORE years ago and I was covering their advice program for a local newspaper. They allowed me to sit on a couple of their interviews. Their reasoning was basic. What have you got? What's the idea? How have you tried to market it? What are your projections for sales? How much of your own money have you already put in to it? They would either advise them to go back and do some more work on their business plans or recommend possible funding choices.

Guess what folks? This common sense still holds 20 years later. If you think it doesn't, you are in for a very frustrating time.

Laura Bell is Freelance Writer and owner of www.bellbusinessreport.com. The Bell Business Report offers common sense business advice and how-to info for running your business. It takes the everyday headlines apart, dealing with business news, and shows you how to put that information to work for you.

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