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Beware the 'Shiny Stuff' Seduction Don't blow your startup budget on unnecessary bells and whistles.

By Luke McKinney

Opinions expressed by Entrepreneur contributors are their own.

What could be better than starting your own business, getting everything you ever wanted to do your job properly and being king of your own über-equipped office empire? Simple: still being king next year--instead of loading your expensive toys into the back of a "Bailiffs and Bust Co." moving van. You won't blow your budget on champagne-powered Porsches for "client meetings," but it's important to control some far more sensible sounding spending suggestions.

In the recession, many professionals are going into business for themselves, taking the chance to break free of everything that annoyed them in corporate culture--one of the most famous frustrations being the hoops you have to jump through to buy extra equipment. But small business bankruptcies are booming: over 43,000 small US businesses filed last year. That number is up 54 percent from 2007, which was up from 2006 and you might have noticed this year isn't bucking the trend. This isn't time to thumb through the shiny new hardware catalogues--hitch those thumbs in your tightened belt instead.

Equipping a new office is a fine line between being on Wall Street and a kid in a candy store: you don't want your brand new business to fail because of penny-pinching, but every cent spent is taken out of the pile keeping your company alive until it's profitable. The worst example of stupid startup spending was the dot com kaboom--in fact, the worst example of pretty much everything an entrepreneur tries to avoid is embodied there. Businesses like Boo, Clickmango, Sportal, and far too many silly-sounding words to mention burned through billions without any result, and when the collectors arrived they carted out everything from ping-pong tables to double-decker beanbags.

Obviously you won't make the same mistakes, but how can you avoid more intelligent errors? What questions should you be asking every time you're about to be invoiced?

  1. What You Need, Not What You Want
    The idea of fantasizing over a laser printer is laughable. It's also true. With a startup budget safely in hand and a barren workspace just begging to be filled with productivity, it's very easy to go top of the line with everything. That's because the makers design it that way. It's their job to sell as much laser printer as they can, and it's your job to battle the urge to get the very "best" instead of getting only what you need.

    "But it's only an extra $300 for the color-multiplexing-staple-undipper!" you cry, not realizing that every single item in the office comes with these cunning extras. Even though you've carefully drawn up an equipment budget it's all coming from the same pool, so the question is: how much money do you have to live on until you become self-sustaining? Thousands of good ideas came from the wreckage of the first wave of web businesses. How many could have actually worked if the company had an operating budget, instead of awesome aspirations and an arcade in the lunch room?

    Ask yourself: Have I "rounded up" to include options I'm not going to use?
  2. Don't Be Ready For Everything
    Once upon a time there was a magical office with all the equipment of a full copy shop, but none of the staff. The immense photocopier slumbered in a back room like an ancient plastic god, awaiting the foolish mortal who attempted to make it perform any of its 4,000 functions. The logic behind the purchase was clear--the office regularly released client information packs, and should there be any last minute emergencies they might need to print their own. What wasn't clear was which brave office hero would actually try to work the beast.

    So instead of last minute efficiency, you have an office full of stressed employees struggling to comprehend the commands of this monster with exactly zero time. Deadlines are no substitute for expertise. You don't need extra hardware, soaking up space and resources until their call to action. You need the phone number of a printer who does rush jobs.

    Ask yourself: If I buy this, will we use it every day? If not, is there a company who can do this for us?
  3. Time Is Money, But How Much?
    "It'll save so much time!" is the battle-cry of the gadget-guru, blackberry clattering against memory keys in his pocket while he orders custom software through his Bluetooth iPhone earbuds. But here's the secret: the aim of your business is not to make your life easier. If that was the case you'd have founded "The Brandy and Leather Chair Testing Emporium", or perhaps "Chocolate and DVD Reviewers, Incorporated."

    As an entrepreneur your time is a resource to be intelligently used, not hoarded in some mythical temporal vault paid for by a thousand applications. If you're still waiting for the business to hit 100 percent, you don't need digital downloads or extra equipment to save thirty seconds on each process (after two hours of installation and acclimatization, remember, so you need to use them 200 times to even break even).

    When you can't take on more clients because you're busy, go ahead and get any labor-savors you like because you're already working. But when all it's doing is freeing up Facebook time or LinkedIn lunch breaks, keep the credit card in your pocket.

    Ask yourself: How often do I perform this task? What will I actually do with the extra five minutes?
  4. Counting the Concealed Costs
    The bigger and better the item the more likely it'll eat into your operating budget. Any small business owner will tell you that laser printers are handy, but going by the cost, those toner cartridges are filled with ink scraped from White House stationary. That new wifi router might enable every employee to work anywhere in the building, but when it goes down everything grinds to a halt. In fact, work starts going backwards when employees tinker with technology they're not trained for instead of getting back to their desks. Some super-"saving" servers require expensive experts to fix and your entire business is held hostage until you pay.

    You can't plan on things working. You have to know what to do when things go wrong, and if you didn't already know that you should reexamine your business plan.

    Ask yourself: How much will this cost every month? What do I do when it breaks?

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