You may be wondering if I have concluded the series on’ why some businesses fail’ which I started few days ago. I have not concluded it of course! The reason number two I gave which is ‘funds mismanagement’ led to this article. I reasoned that it is necessary to do more justice to the point so that people can know how to prioritize better.
For this reason I will be sharing with you the business strategy by Harvard professor, Lan Macmillan, which he called ‘the strategy of asset parsimony’
This strategy is actually a very good startup business model especially for entrepreneur with limited resources. So, what did Lan Macmillan say about this strategy. The strategy is in form of commandments as it spells out ‘don’ts’ about business. Below are the guidelines of the strategy:


Do not buy new what you can buy secondhand
We all know that anything bought secondhand is less expensive than new items. With the types of goods we have in the market today, some secondhand goods are more durable than the new ones. Buying secondhand items does not necessarily imply that you are buying inferior items. Even, if the value is not as high as that of the new ones, you can still make use of secondhand in as much it delivers desired results. By the time you stabilize and are ready to buy new, you can even discover that what you would have bought new by spending huge amount of money that time is now outdated.

Do not buy what you can lease
This is a vital source of finance for companies. Unfortunately, only few people know about this or make use of the opportunity. Instead of outright purchase of equipment, you can actually lease the equipment from a leasing company. Instead of huge cash outflow at a time for the purchase, you only need to pay rent which can be monthly, quarterly or annually depending on the agreement. This will not only ease your liquidity; it will also afford you the opportunity to use the equipment and get to know its features before embarking on the purchase of your own.

Do not lease what you can barter
Have we forgotten trade by barter? This used to be a means of exchange before the advent of money. You look for somebody who needs what you have, the person exchange it for what he has that you are in need of. If there are items such as furniture, computers and other assets that you are not using, why can’t you exchange it for what you need? You don’t need to do this in a traditional trade by barter. The best way to do this is to sell those items and use the proceeds to buy what you need.

Do not barter what you can borrow
If you can easily borrow what you need without any stringent conditions attached, then you might not need to dispose your assets as they can still be useful in the near future.

Do not borrow what you can salvage
There is something with borrowing. Any time you borrow, you become a debtor to the lender. Even, if the person is not expecting repayment, you owe the person the credit which you might need to pay in another form.

Do not salvage what you can get for free
You will agree with me that it takes some efforts on your part to salvage. So, if it is something you can get for free, why not? You can use your time and efforts on other productive things.
If you apply this strategy, you will discover that you can actually achieve much with whatever resources you have.
Source: http://www.businessinfohub.com/2015/05/28/what-successful-entrepreneurs-do-to-succeed/