When venturing into the world of business with your own startup, there can be a shock to the system when financial expectations meet reality. According to CBInsights, 29% of startups fail during the initial years because they are unable to fulfill the costs required.
Fortunately, there are many ways you can learn to save money that can be the key to your success in the initial stages. Gaining this discipline early will only benefit your business down the line and no doubt impress future investors.
This guide seeks to get you started on the right foot with money-saving tips to alleviate those initial financial burdens.
Compare alternatives for your expenses
It is worth putting time aside to review your operating expenditure and seeing where you can save. Be it the space you rent for your working environment, or simply your office supplies, look to gain quotes throughout the year to make sure you are not paying more than you need to.
Comparing other suppliers allows you to check your outgoings are not above the market rate and ultimately lead to you buying smarter. The more time you dedicate to gain knowledge on these aspects, the better position you will be in to negotiate more favorable contracts as your business grows.
Collaboration is key
There are other ways of paying for things and achieving business growth than simply paying for things. By swapping services with other entrepreneurs, you can gain valuable knowledge whilst also building a network of collaborators. In the world of startups, if you are looking to achieve something as a new business owner, it is likely someone has faced the same challenges and asked the same questions before.
From coworking spaces to industry events, find places to talk to others about areas where you could benefit from outside expertise. This can be highly beneficial for your own reputation as your business grows. You never know when a long term business relationship may come in useful down the line.
Make use of new technologies
New software and apps are constantly being developed that can make your life easier and save you money at the same time. By automating services within your business through technology you will likely increase efficiency, freeing up your time and money to invest into other areas. From cloud based services to automated marketing outputs, there are countless ways to automate processes, so take the time to explore different options and discover what works best for you.
When investing in these technologies, startups might offer cheaper alternatives to your needs than larger established companies. Be sure to make use of free trials to avoid venturing into paying for expensive software until you are sure of what your needs are.
Have affordable funding at your disposal
It is common to raise money for startups using VC, angel investors or business loans, but these may involve giving up equity or shares early on – and whilst they might seem like a good way to access funding, they can be more costly long-term.
There are a number of ways to save money when looking for funding. This could include speaking to family and friends, using credit lines from banks, invoice finance on future orders or merchant cash advances for your busier periods.
If you need money fast, you may find that you are using more costlier forms of finance, so having facilities and options available ahead of time will be sensible.
Smart Hiring
Costs associated with recruitment can be a real drain on your business. Before taking on full time staff, there may be certain roles in your business that you could consider hiring freelance workers for. This will offer a greater degree of flexibility and save on the expensive contractual obligations associated with full time staff.
When you are eventually ready to grow your team, the recruitment process should be a key focus when considering where to save money. Initially seek to hire entry-level candidates with a focus on capability and eagerness for experience. Building a solid foundation with this framework and putting in the work for training can save your company money in the long run.
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