Startup Advice: How and Where to Reduce Spending in the Early Stages
Small business owners have to work hard to keep their spending to a minimum during the early stages of their operations.
Failure to do so could mean parting with too much of their investment money before making a profit. That could spell the end of the venture if individuals aren’t careful.
All new company bosses should keep their eyes peeled for opportunities to cut back. We look at how stand a better chance of navigating the startup phase without issue.
Don’t rent premises too soon
One of the biggest mistakes new business owners make relates to renting an office too early. In most instances, entrepreneurs could work from home during the first few months. That would significantly reduce any outgoings, and give the individual some breathing space. People who choose to work from home won’t have to pay:
- Premises rental rates
- Council tax fees
- Business rates
- Business insurance costs
Sure, some family members might feel put out by the disruption – however, they are very likely to offer support if you explain the situation. You might want to move into an office when you start to create profit; but, there’s no reason to do that until there is no other choice.
Don’t invest in unnecessary technology
There are many fantastic technologies on the market today that all business owners should use. However, there are also lots of unnecessary advancements that are only suitable for established firms. In most instances, it’s wise to keep things as simple as possible. So, avoid anything that will cost a lot of money until the company has started to make a profit. Think about the cost of introducing cloud storage and cyber security compared to buying Canon compatible ink cartridges for the workplace. That is just one way in which entrepreneurs can cut back during the early stages, but there are plenty of others out there. Just use some common sense!
Know when to outsource
All business owners will have to consider the possibility of outsourcing at some point. Still, it makes sense to think about it sooner rather than later. This is especially true if there are lots of manual tasks performed within the operation. Lots of entrepreneurs choose to outsource:
- Parts of the manufacturing process
- Customer service
- Marketing and promotion
There are companies out there that will manage all those processes on your behalf. In many situations, using their services is cheaper than employing a specialist in-house. So, it’s sensible to research the market and identify the most suitable brands as soon as possible. Get in touch with them, explain the situation, and obtain some quotes.
Focus marketing efforts online
It’s wise to become familiar with the latest digital marketing trends. Real-world techniques are far too expensive, and they don’t provide the ideal results in most instances. So, anyone just starting out will need to learn how to:
- Build a social media audience
- Advertise on Facebook and Twitter
- Use Google AdWords to drive traffic
- Target a specific audience
When it comes to targeting, perform as much market research as possible. Identify qualities that potential customers exhibit, and then use that information to seek them out online. In most situations, you just need to know the ages, sexes, locations, and interests of your target audience.
Use automated accounting software
Most small business owners will not have enough time to focus their efforts on bookkeeping. Indeed, that is why so many new companies will employ the services of a professional accountant. The issue is that those experts charge a fee for their services – money startups don’t often have to spend. Instead, why not invest in automated accounting software. There are packages on the market that will automatically record all financial information. So, all you have to do is press “print” at the end of each working day. The right program will:
- Record all income
- Record all outgoings
- Keep a running total
Anyone who wants to find the best software available right now just needs to search Google., take a look at some review sites, and read the comments made by other business owners – a great way to sort the wheat from the chaff.
Make use of a VOIP system
The last thing any business owner wants is a massive phone bill at the end of each month. However, that happens to a lot of people, especially if their customers or clients reside in a different country. Thankfully, there is a simple solution that will help all entrepreneurs to save a fortune. VOIP systems work in much the same way as traditional telephones – the only difference is that all calls happen via a WiFi connection. That means company bosses won’t pay a penny to talk to someone on the other side of the world.
There are also video calling tools that work using the same technique and process. Skype is the most popular brand out there today, but there are alternatives including:
- Google Hangouts
When all’s said and done, official statistics show that 50% of new firms will fail within the first twelve months. A significant portion of those brands will overspend before they begin to make a profit. So, do everything possible to avoid that mistake, take advantage of the above advice, and never stop learning.