Dane Carlson lists 20 Things Not to Do Before Starting A Business. While I agree with some of his points, I disagree with many others and think that if you follow them, they will either hinder the growth of your business, or get you into trouble. Dane’s point was to help entrepreneurs bootstrap, but it is important for business owners to walk the fine line between saving where possible, and spending where needed.

So let’s go through his list. I will discuss five points at a time, so let’s begin:

1. Don’t quit your day job: Disagree
   This is advice I see repeated for entrepreneurs, but it’s not necessarily good advice in all situations. If you really believe in your business and want it to grow, this is more than a full time job. Aside from the actual work ordered by clients, you have to spend a lot of time on marketing, networking, administration and more. If you don’t quit your day job, your business might not get anywhere since you won’t be able to give it the time it needs.
2. Don’t incorporate: Agree
   I think this is good advice in most situations. Unless you are involved in huge amounts of money or have an investor, incorporating is an unecessary cost and uses money which might be used better elsewhere. I recently met two young entrepreneurs who started a film-making company. They had one or two clients and had been working on very small projects. For some reason they had incorporated their business. By incorporating, they had increased their accounting fees and added many additional annual expenses to their budget, such as the need to open a business bank account (see point 3 below), and use the services of an attorney (see point 5 below).
3. Don’t get a bank account: Agree
   This is true especially in Israel. Israeli banks suck you dry, and every bank account means added fees for every little move you make. This is another reason not to incorporate (see point 2 above), since if you are incorporated you need to open a business account, and in these types of accounts the fees are even higher. In the MATI small business course, the teacher told us that we should open bank accounts for our businesses right from the beginning. I followed his advice, paid the fees for a while, and then decided to save myself some money and close the account.
4. Don’t rent an office: Agree
   If you can work from home and it doesn’t detract from your business in any way, then this is a great way to save yourself a huge expense.
5. Don’t hire an attorney: Agree
   You can generally get by with straightforward contracts with clients that you put together yourself or from templates. Unless you are involved in huge deals like mergers and acquisitions or real estate, attorneys are an unnecessary expense. This is yet another reason not to incorporate your business (see point 2 above), since to incorporate you need to hire an attorney.

Stay tuned for an analysis of Dane’s next five points: Don’t hire an accountant, Don’t get a loan, Don’t hire anyone, Don’t get a business license, and Don’t try to patent anything.

In order to maximize sales and improve marketing tactics, each small business must learn the fine art of bootstrapping. There are many ways to cut costs in order to leverage your assets. Some of these methods are complex and only gradually save money, which is fine if you have the luxury of waiting.

However, many businesses resort to bootstrapping out of urgent necessity and there are certainly ways to cut costs immediately. Below are eight bootstrapping tips that will show you quick results.

1. Switch to VoIP - Many companies are saving thousands each year by using VoIP (Voice over Internet Protocol) providers like Skype. All phone calls are free between Skype users around the world and Skype-to-landline calls are cheaper than traditional long distance services.
2. Sell Your Unnecessary Frills - Did you get overexcited when you opened your office and purchase some unnecessary goods? If you need to free up some cash for more important ventures, then you can certainly do without your hip decorations. Sell them on eBay or Craigslist.
3. Stop Faxing Everything - Are long distance costs rising because of your constant faxing? There are cheaper alternatives, such as scanning documents and emailing them. Most companies will have no problem with receiving a PDF instead of a fax.
4. Go Easy on the Thermostat - Energy costs are hard on everyone these days, not just small business owners. While you don’t want to create a terrible work environment for your employees, there is nothing wrong with asking them to bundle up a bit in the winter and dress cooler in the summer. That way, you can be a bit more sensible with the thermostat.
5. Outsource That Open Position - If you are struggling to cut costs, then the last thing you need to do is hire more employees. Outsourcing is a preferred method of saving money for companies both small and large. Sites like Elance and Get a Freelancer are brimming with eager, virtual assistants who will save you time and money.
6. Buy Secondhand / Refurbished Goods - The fact is, you don’t need a new desk or copy machine. You can find secondhand office furniture at many stores, as well as refurbished electronics. Conduct some research beforehand, however, and make sure you are buying from a reputable source.
7. Go Open Source - There are numerous open source alternatives to the commercial software you may be considering. In case you haven’t heard, open source = free. Free is good, so find out more about open source software at osalt.com.
8. Stop Paying for Lunch - Are you the type of boss who likes to buy lunch for everyone several times a week? That ends now if you want to leverage your assets to the max. Yes, even those pizza deliveries are adding up. For those of you who run a one-person operation, the same rule applies. Stop eating out and start packing your own lunch.

Great companies have been built with very little money and efficient bootstrapping skills. Don’t be afraid to start cutting costs on a smaller scale with the above tips. You will be surprised at how much money you will save… money that can be put toward marketing, for example.

[Image from Jeff Belmonte's photostream on flickr]

When I started my home-based business, I was inspired by the many articles touting the benefits of self-employment for mothers. However, reality can be pretty different than ideals, so I would like to come right out and dispel some of the commonly-held falsehoods about self-employment:

The lie: You can save on childcare.

Yeah right. Try getting work done with a kid on your lap tapping happily away on your keyboard, or pulling the pots out of the kitchen cupboard. Even when they’re sleeping, you never know if they’ll wake up in five minutes or two hours. The result - pressure! This does not yield high-quality results.

The truth: Get a babysitter, or a nanny.

Or consider daycare. Better that they spend a few hours under someone else’s care and that you really get your work done, than that you spend all day trying to get your work done, but never really finish it and always feel unaccomplished and edgy.

The lie: A home-based business means you can work less and earn more.

I quickly realized that I was spending more time on my business than I did when I was a part-time employee. That is because when you run a business, you wear all the hats. You are responsible for accounting, marketing, client management, etc. And there are no paid vacation or sick days. You work - you get paid. You don’t - nada.

The truth: Be prepared to put a lot of time into your business

Particularly if your start-up resources are scarce. If you are a one man/woman show, your failures are your business’s failures.

The lie: Creating a cozy home office allows you to separate your work life and home life.

Maybe this is the case for people who live in sprawling homes with rolling green lawns. But for those who live in cities, or in Europe or the Middle East, housing standards are different. For example, families with many children often live in apartments with only a few rooms. And when I say rooms, I mean bedrooms and one multi-purpose kitchen/living room/dining room. No family room with crackling fireplace. No den. No basement. So where exactly are you going to put your cozy little office? In the bathroom?

The truth: Be prepared to work in your bathroom.

Or your bedroom. I know someone who changed one of their bathrooms into an office. I personally worked for two years in our bedroom perched on the corner of a tiny desk. The work/family separation thing? Really difficult to maintain when you’re working out of your bedroom. Or bathroom.

Don’t get me wrong - I’m a big believer in self-employment. I love running my business and watching it grow. I get a great feeling of accomplishment from it, and I do have greater flexibility and can rearrange my schedule as needed, i.e. by working in the evening when the kids are sleeping. But preparedness is a key factor in your success.