When I started my company, I believed that I had to fill a gap of credibility I had compared to my established competitors. One way I thought I could fill that gap was to rent expensive office space in a well-known part of town, Greenway Plaza, and fill it up with nice furniture and new IT equipment. All of this was a big mistake. When it came time to close my books for the year, I operated at a loss in 2017. The investments in rent and office equipment totaled over $42,000 alone, that provided next to no benefit to the business, but I learn these three things:
Keep it lean, only pay for what you need!
Having a business address in a central location that is well-known like Greenway Plaza puts a message out to the Houston market that you have a legitimate business. I am certain that is true. What I learned is that I could have simply paid just to have the greenway address and rent an office for a few hours or a day to work out of or have meetings only when I needed it. If I had followed that model I estimated that my expenses would have been less than $12,000 for the year which is 29% of what I spent in 2017 and $30,000 less. Imagine what I could have done with that $30,000 if I invested it into marketing!
Don’t get too far ahead of yourself, you might not catch up.
I spent so much money, time and effort in trying to prove to everyone that NocserV was a legitimate and successful business that I almost sunk the whole thing. What I learned is that it is important to prove you are having successes but to do so in an authentic and organic way. What this means is to make a big deal out of even the smallest wins, and show humility and learn from even the smallest mistakes.
Credibility isn’t purchased, it is earned.
When I explained to my accountant about the money I had spent on the office, he offered up some valuable advice to help me rethink credibility. He said, “Brian, you don’t earn credibility by having a nice office, you earn credibility by doing what you say you’re going to do.” I will always remember that lesson and focus more on earning my credibility than trying to buy it.
My outlook on running a business is that there are wins and learns (not losses.) And I do consider the $54,000 that I spent last year on labor, furniture, and rent as a learn: You earn credibility, to keep it lean, and you need to stay authentic. I also see many of my friends spend roughly this same amount to go through Masters programs and land back in the same spot that they started in. With the lessons, I learned I feel like that $42,000 was an investment in myself, it was my MBA.