Starting a new business is a huge risk. There are no guarantees that your business will be a success, no matter how much blood, sweat and tears you and your partners put into it.
As a consequence, it is possible to be left with a lot of debt and bills, with no profits to pay for them. Choosing the right type of business organization can help minimize your personal liability and or risks. But it is just one tool in your belt for keeping costs down while your business is in its infancy.
An article in Dayton Business Journal provides three tips for keeping a new business “lean and mean,” cost-wise. Here they are:
1. Don’t hire people until you can afford to. This means you and your partners will have to do virtually all of the business tasks yourselves, at least at first.
2. This likely means not being too rigid with titles and dividing up responsibilities. With such a small workforce, it is smart to identify everyone’s strengths, and put them in a position to use those skills to use. Put the good of the business over egos.
3. When you are ready to hire, start slowly and carefully. Hire only as many people as you need and can afford.
This means that the partners must invest a lot of hours and labor getting their business off the ground. Not that they would anyway, but avoiding the temptation to hire a bunch of employees at once can lead to overwhelming payroll and other costs.