Did you know that entrepreneurs worldwide launch over 100 million new businesses every year?
If you've got an idea for your own small business, you're probably eager to get the ball rolling. But before you take that leap, consider another impressive statistic: 90% of all startups will fail.
One of the main reasons so many businesses fail is because of cash flow problems. This is especially important at the beginning of the venture when too many people learn lessons in business the hard way.
What can you do to cut down on startup expenses and ensure yours is among the 10% of startup businesses that survive? Here are 7 expert cost-saving tips to remember when launching your startup.
At first, you may only need a phone, computer, and Internet connection to launch your startup. Set yourself up with a desk and a comfortable office chair, and you have everything you need to get started.
This will result in significant cost savings over renting and furnishing any commercial office space. If you need to meet clients face-to-face, simply rent an executive suite for the day or week.
Then, as your business expands and generates reliable income, you can consider setting up a permanent physical office.
You may be the only employee of your startup for quite some time, and that's okay. In today's super-connected world, there's no need to hire people for every little job your business needs.
Savvy business owners rely on outsourcing for things like web design, bookkeeping, and answering services. This keeps your initial costs down while ensuring you have what you need to keep your company moving forward.
Let's say you're starting an online marketing company and your computer crashes. You contact Techville to do the repair work. Rather than paying for their service, offer to write a fresh marketing plan in exchange for the work they do on your computer.
Of course, bartering won't work for every situation, and some companies may not be open to the idea. But there's no harm in making the offer; it could save you a lot of money in the long run.
In many cases, you can cut those initial costs by buying used or refurbished equipment. Reach out to some established local businesses that may have older equipment they're willing to sell.
You might also look into leasing any vehicles or equipment you need rather than making a large upfront investment. This will leave more capital in your bank account -- where it's needed most.
If your spouse only works part-time, maybe they could devote 10 or 20 hours a week to helping you with bookkeeping, banking, or emails. If you have older teens in high school, could they work a few hours in the evenings or on the weekends?
What about that millennial living in the basement with a college degree and no job? This is the perfect chance to get him or her some valuable real-world work experience.
The solution? Search for free software and use it until your business is firmly established.
Many free software programs are as good as the paid ones. Some traditional programs might be available for a free 30-day or 90-day trial. When your free trial is done, simply uninstall and reinstall the software from a different site.
The same goes for building your business website. In the beginning, a free template and web hosting site are probably all you need to launch your business. As it grows, you can consider hiring a web designer and switching to a self-hosted site.
Start with the vendors you regularly do business with. Can they offer you discounts if you buy in bulk or if you pay in full within a certain period of time? This can significantly increase your profit margin and help save on initial costs.
In some cases, you may also be able to defer payments rather than paying everything up front. The key is to communicate what you want (and what your business needs) and find a solution that works for both parties.
Put these cost-saving tips into practice when starting your business, and your company is sure to thrive.
Once you've got your startup underway, what's next? Check out our office ideas and upgrades to keep your staff happy and productive.
If you've got an idea for your own small business, you're probably eager to get the ball rolling. But before you take that leap, consider another impressive statistic: 90% of all startups will fail.
One of the main reasons so many businesses fail is because of cash flow problems. This is especially important at the beginning of the venture when too many people learn lessons in business the hard way.
1. Start with a Home Office
69% of small businesses start at home. Is this the smart route for your business model?At first, you may only need a phone, computer, and Internet connection to launch your startup. Set yourself up with a desk and a comfortable office chair, and you have everything you need to get started.
This will result in significant cost savings over renting and furnishing any commercial office space. If you need to meet clients face-to-face, simply rent an executive suite for the day or week.
Then, as your business expands and generates reliable income, you can consider setting up a permanent physical office.
2. Outsource Instead of Hire
Hiring and maintaining a large staff may not be practical when you're first starting out. Full-time employees require insurance, pensions, and other "perks" that can quickly drain your resources.You may be the only employee of your startup for quite some time, and that's okay. In today's super-connected world, there's no need to hire people for every little job your business needs.
Savvy business owners rely on outsourcing for things like web design, bookkeeping, and answering services. This keeps your initial costs down while ensuring you have what you need to keep your company moving forward.
3. Barter for Services
One of the best ways to cut costs in small business is to work a trade or bartering system. Not only does it save you money, but it helps you build good working relationships with other local businesses.Let's say you're starting an online marketing company and your computer crashes. You contact Techville to do the repair work. Rather than paying for their service, offer to write a fresh marketing plan in exchange for the work they do on your computer.
Of course, bartering won't work for every situation, and some companies may not be open to the idea. But there's no harm in making the offer; it could save you a lot of money in the long run.
4. Buy Used Instead of New
We all love shiny new furniture, appliances, and gadgets -- but are they really necessary for your startup?In many cases, you can cut those initial costs by buying used or refurbished equipment. Reach out to some established local businesses that may have older equipment they're willing to sell.
You might also look into leasing any vehicles or equipment you need rather than making a large upfront investment. This will leave more capital in your bank account -- where it's needed most.
5. Get Your Family Involved
Back in the "old days," people had large families so everyone could work on the family farm. Could the same principle be helpful for your startup and keep more money in the family?If your spouse only works part-time, maybe they could devote 10 or 20 hours a week to helping you with bookkeeping, banking, or emails. If you have older teens in high school, could they work a few hours in the evenings or on the weekends?
What about that millennial living in the basement with a college degree and no job? This is the perfect chance to get him or her some valuable real-world work experience.
6. Consider Free Software
A major ongoing expense of many companies is all the software needed to run the business. Between bookkeeping software, word processors, and web hosting, this software can cost hundreds or even thousands of dollars every year.The solution? Search for free software and use it until your business is firmly established.
Many free software programs are as good as the paid ones. Some traditional programs might be available for a free 30-day or 90-day trial. When your free trial is done, simply uninstall and reinstall the software from a different site.
The same goes for building your business website. In the beginning, a free template and web hosting site are probably all you need to launch your business. As it grows, you can consider hiring a web designer and switching to a self-hosted site.
7. Become a Skilled Negotiator
If you're not already a good communicator and negotiator, it's time to hone your skills.Start with the vendors you regularly do business with. Can they offer you discounts if you buy in bulk or if you pay in full within a certain period of time? This can significantly increase your profit margin and help save on initial costs.
In some cases, you may also be able to defer payments rather than paying everything up front. The key is to communicate what you want (and what your business needs) and find a solution that works for both parties.
The Best Cost-Saving Ideas: Now You Know
Some costs associated with startups are unavoidable. But knowing where and how to cut costs can make the difference between your company's success--or failure.Put these cost-saving tips into practice when starting your business, and your company is sure to thrive.
Once you've got your startup underway, what's next? Check out our office ideas and upgrades to keep your staff happy and productive.
Ashutosh Jha
Ashutosh Jha is a professional blogger, Blog and IT Consultant. He writes about Blogging, SEO, Making Money, Internet Marketing and Web Design.
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