For most startups, saving money is hardly optional. It makes a difference between staying afloat and going under. It is estimated that 8 out of 10 startups fail and the sinister title of the top killer goes to financial trouble. To be more precise, poor money management and reckless investments quickly deplete the money reserves and push startups into the treacherous territory. So, you have to step up, get to know your needs, and allocate the resources accordingly. Here is how to keep the spending in check and lay the foundations for sustainable growth.
Save on your workspace
Overheads are a budget-sinking menace. To steer away from it, note that going all in with a dedicated office space may not be the smartest option money-wise right away. Many entrepreneurs have managed to get operations off the ground from the comfort of their home. They worked in a secluded corner and delayed renting a traditional workspace for a while. At one point, you can move to communal space or rent a small office. But, until you acquire many clients and hire other people, you can do with whatever space you have and thus saving money when you need it the most.
Smart hiring policy
Payroll account for a lion’s share of startup costs. To trim it, explore outsourcing and hiring on contract. Most startups decide to hire freelancers to maintain their networks or design websites. This investment is dwarfed by costs that in-house IT department would impose. What is more, full-time employees increase tax liabilities and require additional perks and benefits. In case of outsourcing, the lack of oversight puts some entrepreneurs off, but with modern communication platforms, that should not be a problem. And, of course, in case you recognize a great potential, you can always offer a permanent position.
Buy used and lease
There are so many costs linked to launching and running a startup. Knowing when to purchase and when to lease can go a long way towards improving the bottom line. For example, in case your startup requires major pieces of equipment, you can always opt for scissor lift hire or rent anything else you might need rather than buying it. Also, note that you can purchase used stuff or in bulk to cut the costs. When getting equipment and office supplies, these small saving opportunities quickly add up. Likewise, instead of buying new cabinets, printers, tables, and chairs, consider shopping around for used furniture. Provided that you’ve taken the time to do your homework, virtually anything can be bought second-hand and still used for years and years.
Boost the energy efficiency
Utility bills can bite off a big chunk of the budget, but it doesn’t have to be that way. To make strides towards energy efficiency, focus on reducing water and electricity consumption. Purchase office equipment with an ENERGY STAR label to achieve considerable long-term savings. Install LED or CFL fittings and ditch energy-sapping fluorescent bulbs. Invest in a programmable thermostat and water-saving features, such as low-flow aerators. To go an extra green mile, take advantage of cloud solutions and store everything digitally instead of cluttering the office with piles of paper.
Employ digital marketing
Making a name for yourself is the only way to hit it big, yet traditional marketing costs an arm and a leg. Well, that is when digital marketing tools come into play to save the day. Namely, cost-effective online channels have incredible reach and they bring a great ROI. Depending on your target market, they could build trust with potential customers. So, establish a strong internet presence using an affordable web builder and get in front of your audience. Set up social media profiles and make waves in the bustling networks like Twitter. Spread the word without breaking the bank in the process.
Grow out of financial woes
Scary statistics and grim startup reality require caution and frugality. It would be wise to learn from other people’s mistakes and be careful when it comes to spending. To overcome the growing pains and move towards prosperity, you have to identify the areas where the belt can be tightened. The trick is to pull it off without undermining the quality of products/service or customer satisfaction. If you do it right, you will have more cash to dedicate to what matters the most for your business or cover unplanned expenses.
You know what they say: a penny saved is a penny earned.