Starting a new business often requires a financial investment, and with a limited budget, it can be hard to keep a healthy cash flow. One thing that can help start-up businesses, and also benefit established businesses, is to save on costs. Saving costs, however small, can add up to significant savings, helping push your business forward and improve your profit margins. If you are looking for new ways to save costs when starting a business, this guide will give you some tips.
1. Stick to a Budget
Make a budget where you allocate the funds you have to different areas of your business, and stick to it. Overspending in one area will have a knock-on effect on another, and this can cause hold ups that prevent your business from growing. It is also a good idea to include a buffer amount within your budget, so you have extra funds available should unexpected costs arise.
2. Trade Services
Trading services can be a beneficial way to save money for your business. For example, you might not be able to find the funds to get business literature printed, or maybe you want to hire a venue to set a launch party but can’t cover the total amount. One way to get around this is to talk to different companies and offer a trade in services. So you might get your printing done for free in return for offering a free service from your business or at least get a discounted rate. Trading services can be a really effective way to save costs, so don’t be afraid to ask!
3. Research your Options
The service providers you need to have in place for your business to run should be reliable and also cost-effective. Research each provider and make sure you are not paying for add-ons that you really don’t need. Also look for lower cost options.
4. Use the Cloud
Buying software programmes to install on computers, or paying for a set amount of bandwidth can be expensive. This is where cloud computing comes into its own. With cloud computing, there is no need to run servers which are expensive to buy and use a lot of energy to run. It also offers the flexibility of having staff work remotely, as file sharing is simple, and this can boost productivity and increase profits. Cloud-based computing is also usually paid for on subscription, so your business gets to use powerful technology and software without ever having to buy it as a physical package.
5. Avoid Business Premises
To begin with, if you can use your home as the hub of your business, you will save money each month on renting office space, paying business rates, utility bills and more. If you have staff, opt for remote working and have a virtual office where you can share files, and have meetings on Skype or similar.
If you find working from home isolating, or that you have distractions that prevent you from concentrating on the jobs that you need to do, there is also the option of co-working, where you share workspace with other individuals. Opting for a co-working space reduces the amount you’d have to pay to rent an office while giving you the benefits of having a talented, motivated community around you.
6. Second-Hand Equipment
You don’t need to have brand new equipment for your business. If you are buying office furniture, computers and laptops and more, second hand or refurbished equipment can be just as good as new, without the price tag that goes with it. If buying electrical equipment, choose a reputable dealer that gives you a guarantee. If you don’t like the idea of buying second hand, there is also the option of leasing office equipment. Leasing saves money on purchasing until you have enough funds to do so.
7. Bootstrapping
A bootstrap business is one that is started with little initial investment; rather growth is driven by results. It is not an easy process to develop a business with little financial resources. However, it is sometimes the only option available to cash-strapped entrepreneurs. Initial start-up costs may be from personal savings or money borrowed from family and friends, and whatever profit is made is put back into the business to develop it further.
Bootstrapping takes determination and a willingness to learn. Success is not usually something that happens overnight, and bootstrap business owners are often motivated by the long-term results that come from working hard.
8. Keep Working
Don’t be tempted to quit your regular job until you are making enough money to support yourself with your start-up business. It might mean working for long hours as you get home from work, and then get started on developing your business, but it does give you peace of mind that you have some money coming in until you are up and running.
9. Hiring Staff
If you need to hire staff but can’t afford to pay them, you could offer a stake in the business in return for their labor. This will take some negotiation and legal paperwork, but it can be the boost a business needs to get traction.
Other options would be to offer a deferred payment, so staff will be paid once the business makes enough money. This, however, is not something most people would be willing to do as there is no guarantee of business success.
When starting a business, every dollar you can save makes a big difference. When you first start, it can be hard to know when you will begin to see a return on your initial investments and also to have a clear idea of each expense as it arises. That is why having a budget in place helps keep control of spending. Saving money where you can leaves you with more room to cover costs as your business develops, so it is good business sense to make it a priority.
EDITOR'S PICKS
Top Priorities To Drive Your Business Forward
Different Ways To Raise Up Capital For A Business Start-Up
8 Practical Examples of Nameplate Usage Across the Industries
Top Marketing Tips For Startups
The Essential Guide To Starting A Business In The Financial Sector
Listen Up! Here’s Where Your Business Budget Needs to Go
Simple Ways Your Business Can Effectively Manage Complex Processes
Simple Ways To Complement Your Business’ Income Without Harming Your Reputation
How to Stay Connected to Your Customers During Uncertain Times
5 Secrets of a Successful Sales Letter
Keep in Mind These Things Before Starting a Wedding Photography Business
The Pros and Cons of Trading Stocks
