Simple Is Okay
You don’t need lavish furniture or the latest equipment to run a successful business. In fact, all too many people start a business with the attitude that they are going to “do it right.” They rush out and purchase the best of everything they need—and everything they don’t need. I can’t emphasize it enough—this is a big mistake! You are much better off doing everything “wrong.” Buy the cheapest of everything, and conserve your cash for running your business.
When I was in my teens I visited my grandfather’s shoe company, Crest Shoe, in Lewiston, Maine. I was expecting to find a smaller version of a TV-set Fortune 500 company. Instead, I found an old, dirty, and dilapidated building. The furnishings and general appearance of the interior were depressing. My father pointed out that a fancy office wasn’t necessary to conduct a successful business. The fact is, Crest Shoe remained a profitable business for decades after just about all the other shoe companies in Lewiston had gone under.
Bankruptcy auctions offer a terrific opportunity to acquire furniture, fixtures, and equipment. You can often pick up desks, computers, and chairs for a fraction of what they might cost at a secondhand dealer.
Some of my office furnishings were culled at an auction for a Boston consultant that operated from a spectacular office suite in one of Boston’s most prestigious suburban office parks. I’m sure the decor impressed the consultant’s clientele. But so what? It was going out of business, and these high expenditures may have played a part in that.
The day after the auction, while I was filling up a truck with my finds, I noticed the bankrupt company’s stationery on a desk. The chairman had been one of my Harvard Business School professors.
Remember, it is better to have cash in the till than designer desks and chairs filling the office. Sometimes it’s also better to be cheap than to have a Harvard Business School degree!
When large corporations dispose of their furnishings, which they do when the old colors don’t mesh with the new CEO’s color palette, office liquidators negotiate to buy the entire lot of furnishings. They then sell it off, in smaller lots, to other businesses. Prices are higher than at auction, but the selection is usually broader and delivery and merchandise guarantees are often included.
When I was first starting out in business, I purchased some beautiful wood desks from a hotel liquidator—that itself was going out of business. These desks were in like-new condition, cost 10 percent of their replacement value, and came with a bonus. They were formerly housed at the Boston Sheraton Hotel. I was blessed also with complimentary bibles!
Leasing is a great way to pay for equipment that is more difficult to locate secondhand than basic office furniture is. Even a new business with no credit history can obtain equipment through leasing. You might have to pay higher lease rates than you’d like, but sometimes minimizing your initial cash burn is more important.