When it comes to starting a business, there are many advantages to starting small, starting right where you are with what you’ve got rather than waiting until when you have ‘enough’ money. Not having enough money is the single biggest factor why people delay starting on their goals and going for their dreams.
1. You make small mistakes
Making mistakes comes with the terrain. When you travel a road you have not gone before, chances are you will make mistakes. When you start small, you do not have much at stake. When you make mistakes, the financial impact is minimal and easy to recover from. If only your savings is at stake, you can easily recover from a loss if an investor’s or creditor’s money is involved. A setback may mean closing the shop while you pay your debts.
2. You get better deals
When you negotiate with a small amount of money in your pocket, you get better bargains. Do you notice that you tend to overspend when you have a lot of money in your pocket? You drive a harder bargain when you don’t have enough money, and on these shores when the price you pay is based on your bargaining power, you never know how low the seller will go until you walk away. When you do not have a financial war chest, do a lot of market surveys and due diligence before you let go of your funds.
3. You know the right equipment to buy
When you are starting out will enough money to buy all the equipment you need, chances are you will go out with a shopping list. You will buy anything you think you might need, only to find out later on that some were really not necessary while some do not perform the functions you envisaged. It’s a common mistake for business starters, especially the ones who can only allow a small investment to purchase or rent fancy office furniture, business phone, fax dedicated lines or pay for a company logo.
When you start by improvising and saving up for the equipment you really need, you get to acquire the experience to make a wise decision when it comes to equipment procurement. You will also get to know how to get a better deal since you are already in the business.
4. You know what to look for in your employees
When you are just starting out, armed with start-up capital and a virgin business plan, you do not have much experience in hiring staff. Since your business is not yet operational, you have no idea which gaps you have and who to hire to fill that gaps. You will tend to hire based on areas you think you need staffing. When you start small, you are a jack of all trades; hence you know the intricacies of each position and are in a better position to interview prospective employees.
5. No employee can hold you to ransom
This flows from the previous point. When you have been there and done that, you know the in and out of the business and no employee can hold you to ransom. If a key employee resigns without notice, you can easily step in while you shop for a replacement. This reminds me of a true story of a driver who pulled over a busy highway and handed over the car keys to his employer. The employer did not know how to drive, so he had to abandon the car and proceed by public transport, and later send someone to retrieve the car.
6. You get accelerated learning
When you don’t have tons of money, you are forced to learn on the job. This makes you more grounded and better equipped to grow the business since you have a firm grasp of the fundamentals. When you don’t have enough money, you tend to look for help. This speeds up your learning process and when the funding eventually shows up, you know what to do with it
7. You remain in control rather than circumstances
This is, in addition to point 6 the most important point. When you start small, you are being proactive, not reactive. As a self-starter, you make do with what you have and move rather than wait for conditions to be more favorable. This gives you confidence and better equips you to face more difficult circumstances which are sure to show up as the stakes get higher.
If you are planning on starting a business, starting small allows you to grow without much of the pressure that comes with the fear of failure as you follow the process of gradual growth until you get to the point where you gain enough confidence to apply resources to grow to the next level.
