Are you someone who runs their life on credit card debt? If you are someone who constantly runs in the negative and cannot put money aside to purchase the things you want, then going into business probably isn’t for you. The most important things with running a business is managing money. It isn’t just part of running a business, it IS running a business. In this article we’ll show you how to manage your funds by keeping your costs down.

The needs of a start up computer business are minimal. A good sized foldable table, sufficient power plugs, internet connection, a test computer (my original one was a crappy Pentium 300), test screen, keyboard and mouse are all you need. As we mentioned in our article “Setting Up a Computer Store/Workshop“:

When you first had the dream of setting up your own computer store or workshop, you may have dreamt about some nice leather swivel chairs, big oak tables, lines of filing cabinets and having the whole place nicely wired for your LAN.
Sorry, but this is definitely the wrong sort of thinking for any new computer business.

All those nice test benches, industrial racking and office furniture that you see at your competitors place are for convenience only, they are not a necessity of starting a business.

The same thing goes with business related software packages. You don’t need to buy the higher versions of accounting packages like “QuickBooks Premier”, which retails for $1049 for a 3 user license. The most basic package should be enough for at least the first 6 months of your business. In fact, Quickbooks even has free version to get you started.

When business is good, it is easy to begin spending it in a unwise way which can be fatal to you and your business. For example, buying yourself a sports car to reward yourself for all your hard work and having it on a $200 per week payment plan. When your business hits its slow times, you may not have enough for your basic expenses and that shiny new car of yours.

Analyze your advertising like mad, use a marketing analysis form and find out where your customers are coming from. There is no point spending on ineffective advertising. Try different sizes, colors and distribution areas, sometimes a small change can make hundreds of dollars of difference. We go into this more in our article “The Secret of Advertising“.

It takes money to make money is an old saying and it applies to both new businesses and seasoned ones. However, only spend money on things that will give you a good return. This is why I said don’t spend too much money on furniture earlier in this article, because the furniture wont give you a return. Money is best spent on advertising and things that can make you so your job faster and better such as the SATA/IDE to USB converter we mentioned a few weeks ago.

In short, only buy the minimum of what you need to begin with, squeeze every cent out of marketing to make it as effective as possible and only spend on things that make you more money.