Startups are driven by high risk and low finances. The biggest question for any startup is how to start a company and find the cost to operate it. Having an estimate of the cost before kick starting the business is the key to success in the long-run.
According to the survey of over 150 failed startups conducted by CB Insights found that the reason for failure was running out of finance.
In the initial phase, most of the startups waste their money on buying useless stuff instead of spending on the necessary ones that are important for running a startup. If the cost could not be controlled in the early phase, it would get out of control later. To keep your finances under control, here are some of the tips you need to follow. Have a look at them.
Set Your Priorities
Managing finance is the most challenging part for any entrepreneur. There is unlimited to-do list that needs to fulfill. However, prioritizing them from most important to least ones can help you control your expenses in the early stage.
For instance, office supplies, licensing fees, office space and computer equipment are needed in any case. Moreover, you need to find out how to cut down the cost of purchasing these items. Like if you are looking for an office space, maybe the rent for it is high in the downtown as compared to the one that is outside the vicinity of your city.
Consider Little Things
Sometimes we overlook smaller things and struggle to control the bigger ones. However, the fact is that little expenses such as internet fees, hosting price, office supplies and maintenance of office will eat up your finances.
Make sure to consider these expenses along with other bigger ones. You can cut down the cost of these petty things like purchasing plan for hosting that is well suited in the starting. At the end of the month, you will see half of your expenses slashed down.
Outsource your Work
Startups can’t afford to hire in-house professionals. Hiring an in-house developer, designer, social media manager or writer will eat up your limited finance. Instead of paying them for full time, you can outsource your work. You can find a number of websites where you can outsource your work for nominal charges. Moreover, you will be able to hire professionals who are well experienced and have a strong profile for the skills they have. You can also visit top freelancer websites to have high-quality work at low price.
Start Looking for First Client
Many startup entrepreneurs believe that the means of income will be generated only after the final product is launched. However, for startup products, you can initially create a revenue stream by looking for the first client, focus on MVP development and offer it for the discounted price.
The benefit of launching an MVP will also let you know whether the product will reach the maximum potential or not. Moreover, knowing the reaction and feedback of customers will also help you to cut down the cost of developing final product, demanding more money (in case your product does not get massive traction and failed to acquire customers).
Bring Less to the Market
When it comes to startups, you must have spent sleepless nights on evaluating your idea and giving it a final touch. If you are thinking of introducing every feature and services at once, you should think again.
Ask yourself what are the core features of my product that are important and the least ones that can be ignored for some time. Launch the product and analyze the initial response. If it generates enough revenue, deploy other features in the later versions.
It is not easy for a startup to take control of everything. There are lots of challenges and glitches, which you have to face from time to time. Especially when it comes to financing, you have to be very strict as well as flexible.
Make sure that you revise your budget and spending each month and look for the ways to cut down expenses. If needed, you can hire an accountant to control your budget and handle all your money matters professionally.