Starting a new business can be a thrilling experience. Entrepreneurs have the opportunity to work on new solutions that may greatly contribute to their respective industries. However, it can also be tough to do. Unlike established corporations, startups often face a lot of uncertainties. One particularly common challenge is having a limited budget, which can put restrictions on how new companies operate their businesses.
If you are heading a startup company with limited funding, you’ll want to be mindful of your finances without compromising the quality of your operations. After all, you want every expense to be a good investment that brings your enterprise one step closer to success. Here are six money-saving tips you should know:
Take Advantage of Free Tools
Investing in good tools is a must for any business, but not everything has to come at a great cost. A quick online search will help you find many online resources you can tap into for free. One example is a free video meeting platform that doesn’t impose limits on the number of meetings you can host in a day. This is very helpful if you need to coordinate with your team remotely or communicate with professionals in different locations.
Some free tools come with basic features, while others are offered as a limited-time free trial. Even with the time limit, using free trials can be beneficial for your business. Take advantage of these offers so you can try the software out and explore its utility for your particular needs without making a commitment. Get an upgrade or a subscription only when you are convinced that it is the best solution for your business.
Hire Freelance Professionals
Sometimes, it’s more economical and makes more business sense to hire freelance workers instead of full-time employees. This is often the case in situations when you need people to work on one-off tasks or projects. It is also a recommended approach for projects that require certain specialisations that your current team is not equipped for. Hiring freelance professionals will allow you to get the job done in a cost-efficient manner and ensure that you are working with the right people for the job.
Work Remotely
If you have full-time staff, consider having them work remotely. Renting office space and furnishing it with desks, chairs, and other equipment can be very costly. Also, you’ll need to regularly pay for utilities and office supplies. Remote operations allow you to skip all these expenses and assign your resources to more important things that can grow your business.
In addition to saving your company money, you might have better success with remote workers. Employees tend to have higher retention rates and make fewer absences when they work from home compared to workers who have to physically report to an office. As such, it will help improve your business’s productivity rates.
Furnish Your Office with Practical Items
Some businesses, however, require an office setup. For certain industries, having a space in which to meet with clients and conduct business is important. Because your office represents your business, it’s important to strike a balance between being thrifty with your furnishings and ensuring that you make a good impression.
Identify the necessary pieces of furniture and supplies and refrain from buying anything that’s simply nice to have. For example, if most of your operations involve digital transactions, there may be no need for a bulky photocopy machine. Perhaps a printer that also has scanning capabilities is sufficient for printing the documents you need. Aside from helping you save money, being strategic with your purchases can keep your office clutter-free.
Negotiate at Every Opportunity
In any industry, negotiations are crucial as they can help you get the best possible deal. Aside from getting you fair compensation for the goods or services you deliver to your clients, good negotiation skills can help you get significant savings on your business expenses as well. So instead of taking things at face value, ask the other party if they are willing to consider alternative terms. Will your landlord consider lowering the rental fee in exchange for a long-term lease arrangement? Can you get a discount on office supplies if you buy them in bulk?
Remember, there is no harm or shame in trying to get the best deals. Ask respectfully, and be gracious if your request is denied.
Be Conservative with Your Marketing Approach
While there’s value in marketing your company, you also need to be mindful of what you put your efforts into, especially if your resources and expertise are limited. And even if you have vast resources, investing money in paid ads doesn’t always guarantee revenue. That said, it’s a good idea to take a more conservative approach until you’ve established what works best for your company.
In your first year, keep your marketing expenditures to about five to eight per cent of your total budget. This is a good starting point if you want to get more people to know your brand without risking too much. Also, monitor your campaigns’ performance so you can understand whether or not they’re working or if you need to make changes. Increase your spending as you become more familiar with what tactics work best for your company.
Cutting costs and making practical choices are some of the effective ways you can save money while setting up a new business. Having financial limitations can feel frustrating at times, but you can also treat them as challenges that force you to be more creative in finding solutions. Use the tips above when managing business expenses, especially in your company’s first few years of operation. Knowing how to allocate your capital correctly will go a long way towards ensuring the success of your start-up.