Studies have found that nearly 25% of businesses fail because they don’t have enough money. 13% of businesses struggle to get financing as well. The truth is that most start-ups are not able to get access to angel investors when it comes to financial support. Bootstrapping and taking out a loan may help you, but it won’t be enough to make your business operate smoothly. Because of this, you have to make sure that you keep your initial costs to a minimum. If you want to reduce your expenses, then this guide will help you with that.
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Switch to Remote Work
A lot of companies are now switching to remote working. There are many benefits to having a distributed team as well. The great thing about making your team work from home is that it can help you to greatly reduce cost. Employees can plan their workday out better when they work from home and they can also get a much better balance between their private and professional lives. Statistics show that 77% of telecommuters find that they are much more productive as a result of this. Secondly, remote working helps you to save money. You won’t need to pay as much for office space, and you may also find that you don’t need to worry about travel reimbursement either. Companies can save thousands for every employee that chooses to work from home, even if it’s just for 50% of the time.
Did you know that the average employee uses well over 10,000 sheets of paper, every single year? Businesses spend up to 3% of their revenue every year on printing. One of the best and the easiest ways for you to reduce the cost of your start-up would be for you to go paperless. The rise of cloud computing and cloud technology can help you with this. You may find that document storage is now easier than ever and that you also have access to things such as digital invoicing and inventory management as well. If you want to optimize your printing operation, then it is a good idea for you to invest in managed networking solutions. You may also want to look at print tracking as well. This will give you the chance to monitor your employee’s activity so you can make sure that paper is not being wasted.
As your business starts to grow, you may find that the number of challenges that you experience rises, by a great deal. Since expanding your team may not be an option, you may want to think about outsourcing your operations to outside vendors. According to various surveys that have been conducted, studies have found that 59% of companies rely on outsourcing so that they can lower the amount of expenses they have. Outsourcing is ideal because it helps you to reduce the cost of running your business in more ways than one. You may find that you have way more flexibility and that you can easily reduce the cost of your employee training and recruitment. You don’t need to make infrastructural changes and you won’t have to worry about investing in new equipment as your team grows either. Outsourcing gives you the chance to help your team shift their focus so that you can look at more critical aspects of the job.
You need to first identify the types of business costs you have, whether they are indirect, fixed or even variable. This is the only way that you can have a solid idea of the amount of money you have going in and out of your business. From there, you can then make much better marketing decisions. When you have done this, you can then start to examine all of your expenses so that you can reduce any costs that might not be entirely necessary. When you have taken the time to do this, you may be shocked to see how much money you are spending on things that aren’t essential. When you are buying software for example, you may find that it is easy for you to get overwhelmed. You can reduce your costs here by only investing in the tools which your employees are going to use. You can also save money by switching to a supplier that is much more affordable.
Companies of all different shapes and sizes are known for using bartering as a way to reduce the amount of business expenses they have. Normally when you barter, you will exchange your start-up’s services for another company’s, so you can get what you need without any cash actually changing hands. 65% of companies who are on the Fortune 500 list actively engage in barter. This practice has helped companies who might have been strapped for cash, to survive this far. Bartering helps to give you the competitive advantage you need to really come out on top.
Invest in Digital Marketing
Instead of paying out for a traditional method of advertising, try and look into digital marketing. This can help your company in more ways than one. Digital marketing is highly personalized and social media advertising gives you a way to display whatever content you want, right in front of your audience. Email marketing tools give you a way to segment your newsletter so that you can provide way more targeted feedback too. If you can do this, then you will soon find that it is possible to nurture your leads and that you can rocket your sales more too. Digital advertising works on a PPC principle, which means that you only actually pay for the users that click on your ad. Online marketing is very easy to track, you have a huge range of analytic tools and you can also monitor the performance of your campaign too. This gives you the chance to stop wasting time and money on any tactics that don’t actually work.
Choose Something you Can Do Yourself
This is so that you can avoid hiring employees for as long as you can. This works if you provide a tutoring service, if you are a handyman or even if you offer virtual assistant services. Either way, you need to try and offer something that you can do yourself as opposed to a job that requires you to hire others. When you have established your business, you can then think about hiring others so that you can expand as appropriate.
Work from Home
Renting an office or even a workshop is a considerable expense if you are a start-up. You can cut this cost 100% if you choose to work from home. If you know that it is not possible for you to work from home, then you may want to rent a space as opposed to buying it. If you can do this, then you will soon find that it is more than possible for you to cut down on the amount of money you need to run your business.
Get Some Free Help
If you are starting a business, then there’s a high chance that you have a lot of people rooting for you. This is great, but you do need to make sure that you utilize the people around you. It may be that one of your family members are great at building websites, so use them to make your own. If you have someone who is an accountant, then ask them to talk you through all of the expenses you can claim when you file your tax return at the end of the year. Either way, it’s vital that you ask for help when you need it because if you don’t, then you may end up struggling in the long run.
Did you know that it is very much possible for you to buy things used so that you can save a small fortune? If you need some machinery to run your business, then you will know how taxing this can be on your business profits. Sometimes new machinery can cost thousands, but if you are willing to buy used then you may be able to save a considerable amount. Used machinery is very easy to come by, not to mention that it could give your business the boost it needs to maximize profit from day one.
Have the Right Payment Terms
If you don’t have the right payment terms from day one, then this can really work against you. You may find that you end up struggling to get paid from your customers and this can hinder your profit. You also need to have solid payment plans in place for the vendors that you intend to work with as well. If you can do this properly, then you will soon find that you can make sure that you are not wasting money on vendors, and that you are also getting paid from your customers. Believe it or not, this can help greatly when it comes to your overall business stability, and it can also help you to reduce the financial pressure you experience in the early days of starting a business.