Today we are setting up for an auction tomorrow night. I rent space in a city-owned building that was built as a business incubator. Several smaller businesses started off there, and some maintain permanent offices in that building. I just rent a space for my auctions which means I have to do a lot of extra work.
When someone wants me to sell for them, they bring the items to my house. We unload everything in my garage where I process it. I take the pictures that will be posted online, put stickers on each item with the seller’s number, wrap the fragile items in bubble wrap, put everything in plastic totes with the seller’s number on the outside of the tote. I then transport the totes to a storage unit I rent. The day before the auction my grandson and I haul everything to the auction site, set up tables, and begin to set the items out for sale. Once we have everything set out we put out the chairs for our buyers.
Obviously, there is a lot of extra handling. If I had my own building the items would be brought to the building, I would get pictures of them and set them on the tables for sale. It would be much easier. However, in everything in life there are trade-offs. At 70 years of age it doesn’t make much sense for me to buy a building. So far I have not found one that is affordable to lease. Besides, I do not have enough auctions a year to afford to lease a building, pay the insurance and utilities and maintain the property. I currently have a very nice facility that I can rent on an as-need basis that is very affordable. I would love to not have to do so much extra work, but I’m willing to do the extra work to avoid spending all my profits on a building.
Many entrepreneurs make the mistake of spending too much money starting their business. Instead of buying used equipment they want the latest and greatest with all the bells and whistles. They lease or buy a building their business cannot afford instead of looking for an alternative that would allow them to have a healthier cash flow starting out. They often go into debt to start their businesses making it even tougher to make a profit.
I’ve often heard Dave Ramsey tell entrepreneurs on his radio show to grow their business like a turtle. The tortoise always wins the race. Start small, avoid debt, and be willing to make trade-offs to improve your cash flow and bottom line. It might require a little extra work, but doing this is likely to pay off in the long run.