By Henry Brown
Starting a new business has never been easier than it is today – but it can still be an incredibly expensive process. Keeping tight controls on the initial costs of creating a startup is vital, and if you want to survive on a shoestring, you’ll need to make every penny count. With this in mind, we’ve put together some simple strategies you can employ to keep costs down, make your money work harder, and get through the tough period between starting a business and turning a profit. Let’s get started right away.
Start setting limits
First of all, if you want every penny to count, you need to track where every single penny is going. Draw up a formal budget between you and your cofounders and ensure that you know what is going on in financial terms at any given moment. Put aside time to frequently review your budget, too, as there will be occasions when it makes sound business sense to be more flexible.
Have flexible plans
While we’re on the subject of flexibility, make sure your business plan has some movement either way. There will be occasions where you have to pull parts of a project, and, equally, there will be times when you need to reassign funds to another. In the vast majority of cases, the startup you plan at the outset will be an entirely different beast from that which you take to the market, so a flexible approach should pay off.
Invest in the important things
There are a lot of free services out there that appeal to many startup owners for obvious financial reasons. However, free tools can sometimes make for expensive mistakes. While it might be more costly to invest in higher quality products, in the long-term you will find that free hosting, software, or marketing tools will often end up costing you money and opportunity. We’re not saying you should splurge on every service going, but there is a delicate balance to strike between sensible investment and cheap, shoddy tools.
Slash your rent and rates
Rent and rates are a significant cost for startups, so don’t plunk down money for that picturesque office with river views in the beating heart of the city. It will cost you a fortune, and it just isn’t necessary when you look around at the other options. You can visit The Hoxton Mix website as an example of a coworking space that will save you a significant amount of money. Is there a similar service in your local community?
Focus on making money
The sooner you start selling product or services for your startup, the better. Don’t forget, cash is your lifeblood, and it will give you many more options than just using cost cutting exercises. It’s vital to get out of the blocks as soon as it is possible, and you will find that doing so will get your startup off to the best start.
OK, so that just about covers it. Put these guidelines into action, and you should give your startup every chance of success. Let us know your thoughts in the comments section below!
Henry Brown is an online marketing executive. When he isn’t talking shop he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.