One of the most difficult challenges startups face in the early days is that of managing a tight budget, as when you’re starting a business it can feel like money is constantly going out with little coming back in. This can be a very stress inducing situation, as on the one hand you know capital is required to put things into motion, but at the same time, you can’t help but feel vulnerable given how much money is being spent.
Furthermore, most startups don’t have a bottomless pit of financial resources to tap into, they are starting up on a shoestring and must manage their limited resources as effectively as possible.
In that vein, we’re going to look at three great ways to save money when starting out in business.
- START OFF WORKING FROM HOME
Try to avoid the temptation to rush out and acquire premises. Of course, it’s tempting, as it adds credibility to your brand and will likely make you feel much more like a “proper business” yet, it is often unnecessary and creates a huge financial burden that commits you to a particular location.
Flexibility is key when starting out, both in practical aspects such as location but also financially – so if you’re thinking of tying yourself into a commercial lease, consider whether this is absolutely vital to what your business needs, or whether it’s more of an ego purchase that makes you feel more established.
Startups require agility, as the best startups are able to respond to customer demands and adapt to different market conditions very quickly.
You need to remain as flexible as possible, and one of the cheapest ways to do that is to work from home.
- LOOK FOR LOW ENERGY APPROACHES
If you do decide to acquire premises, you will want to consider utilising environmentally friendly practices within your workspace, not just as a way to ensure esos compliance and being perceived to be doing the “right thing” by your customers and staff… but also, to keep costs down.
A low energy approach can be as simple as turning the lights off each time you leave a room, or installing a timer on lighting, which automatically cuts out if there isn’t motion detected for a set period of time.
Of course, today, electric cars are all the rage and public transport is being promoted extensively as a more environmentally friendly solution to the convenience of jumping in your gas guzzling car…. and when you consider things from a cost perspective, lower energy approaches to business do make a lot of financial sense.
- DON’T HIRE STAFF
Again, similar to feeling the need to go out and get premises, many entrepreneurs feel the need to go out and get staff with a view to feeling more like they have a “proper” business.
Nobody is an island, and when starting a business, you are likely to need the support of others, yet when hiring staff, you are burdening yourself with a lot of financial and administrative responsibility that prevents you from being as agile and nimble as you need to be in order to succeed.
It can be a much more efficient approach to hire people on a project basis, for instance, if you are wanting to create a stunning website, hiring a freelance web designer rather than employing someone as an inhouse designer makes more sense in the early stages. This way, you can optimise cash flow and ensure you are only paying people when you require them.