From the March 1998 issue of Startups

So you're ready to walk away from your job and into your own business? You may be prepared to give up big perks like pension plans, but little things add up, too.

"It didn't occur to me how many incidentals I took for granted as an employee," recalls Sherri Fishman, who left a public relations agency in July 1991 to launch Fishman Public Relations in Deerfield, Illinois. "I knew I'd have to pay rent, and insurance and tax bills were givens. But I [didn't realize that when you] give up your job, you're also giving up use of the company's copy machine, fax and countless other indulgences."

To avoid "sticker shock" after start-up, be prepared for these changes . . . and the costs that come with them:

  • Adios, assistant: If you're leaving behind a secretary, you'll be spending a surprising amount of time placing your own phone calls, drafting your own letters and doing your own filing. Can you afford an employee or temp to handle these tasks?
  • So long, subscriptions: If you're used to having free access to reference books, mailing lists and magazines, get ready for a change. Can't afford to buy books or magazines? Use the Internet or the public library instead.
  • Ciao, copier: If you're not ready to buy office machinery, take advantage of stationery stores, executive suites and mailing centers that offer such services.
  • Goodbye, gadgets: "Memo pads, stamps, postage scales, computer disks, pens, scissors and hundreds of other gadgets totaled hundreds of dollars in expenses," Fishman says. Though inexpensive individually, these little items can add up to a substantial dent in your bottom line. Ways to save? Shop at warehouse stores or pool with other small-business owners to buy in bulk.

Paul DeCeglie is a former staff reporter for Journal of Commerce and American Banker. He can be reached at MrWritePDC@aol.com.

Collect Calls

Not every customer pays bills on receipt, even when an invoice clearly asks for immediate payment. But delays of 60 to 90 days or longer often pose undue hardships for a cash-strapped start-up business.

How should you handle late-paying customers? A good first step is to call and ask when the check was mailed. If it hasn't been sent, ask when the invoice is scheduled for payment. Your goal is to get a commitment.

If the customer offers a good reason for not having paid, try to remedy the situation. If the goods were unsatisfactory, replace them.

If the customer won't agree to pay by a given date, ask why. Once you have the reason, say goodbye and end the call.

If the customer won't give you a straight answer, consider your relationship with them, how important the account is to you and what your cash flow needs are. Then review your options: Should you write off the loss this time and insist all future purchases be C.O.D.? Write a personal letter? Your relationship with the client will guide you in what strategies will work best. If all else fails, put the matter in the hands of an attorney or a collection agency.

Cyber-Savings

If you've put off launching a Web site because you're worried about the cost, relax. "There isn't always a correlation between a site's cost and its quality," asserts award-winning site designer Don Fass. "You shouldn't have to spend more than $2,000 for a professionally designed site that generates sales and enhances your company image."

To keep costs low, Fass advises starting small: a one- to five-page site that describes your business and allows users to contact you. Be sure to let people know what's new or special about your products or services.

More than other forms of advertising, Fass says, a Web site should offer value-added material. "A tire shop could feature a primer on the benefits of different types of tires. This value-added information keeps people coming back to the Web site [and reminds them] to patronize the business."

In addition to setup charges, be prepared for additional expenses, such as hosting fees ($25 to $100 per month), the registration fee for the domain name ($50 annually) and updating to keep your site current ($200 to $500 annually). Also factor in the costs of promoting and publicizing your Web site, which can run anywhere from $50 to $500 per month.

Contact Sources

Don Fass, c/o Metro Interactive, 267 Lester Ave., #104, Oakland, CA 94606

Fishman Public Relations, 1141 Lake Cook Rd., Ste. C-1, Deerfield, IL 60015, (847) 945-1300