Statistics indicate that over the years, the failure rate of startups has been extremely high. One of the primary reasons startups fail is poor financial management, particularly the inability to save money. Here are a few ideas you can implement in your startup to cut costs and ensure long-term success.
April 25, 2017
When starting your business venture, minimize your personal expenses. Avoid the temptation of buying a new car or house, or taking on personal debt. The longer you can keep living with minimal personal expenses, the higher the success rate your business will enjoy. Also, avoid any recurrent business expenses unless they are mandatory.
There are lots of free and cheap software online. You can easily obtain software for customer tracking, project planning, financial management, etc. Also, most business software offer free trials that you can take advantage of. These trial periods help you to use the software for a particular number of days to evaluate the software to ascertain if you need it.
With the current technological advancement, you can work from anywhere. Overhead costs for building a state-of-the-art office can be outrageous for you as a startup business owner. That is why you should consider having a team of remote staff who will use their home as their office. You may also want to consider running an online-only business that does not require any physical office space. One of the firms that have succeeded in doing this is UBank.
Avoid buying because you think you can afford to. The fact that you have sufficient money to buy something does not mean you should. Form a habit of looking online as you shop to ensure you land the best deal. One method of reduced spending is the use of coupons. You will be astounded at the amount of money you can save. Whenever possible, use coupons for essential business purchases. You can keep track of available coupon deals at Promocodewatch. Coupons are one of the primary reasons some companies have managed to stay afloat since inception.
Every business has a particular set of individuals who are paramount to its success. One method of protecting your startup is purchasing insurance for such key people. You as the business owner belong in this group. Key person insurance is just a way of describing life insurance on you and any other prime employees that determine the survival and success of the business. Under this policy, your business is the beneficiary. This insurance coverage is crucial because it makes sure that if the key person is rendered incapable of working under any circumstances, other options will be available to the business apart from filing for bankruptcy.
There are lots of ways to recycle and conserve that add up to saving money. Purchase energy-efficient office equipment to save on energy costs. Use both sides of printing paper, and shop at flea markets and consignment stores when buying office furniture. Also, when making purchases for your business, find suppliers that sell green products. Remember, refillable ink cartridges can destroy your printer. Thus, opt for XL cartridges that carry more ink than the traditional cartridges and also use less plastic.
Find the right suppliers for your products as this will save you lots of money and time. These vendors can help you with product development, provide high-quality materials, offer timely deliveries, and extend your payment duration. Receiving 30 to 90 days trade credit is a big favor to your startup.
Instead of paying for advice on accounting, legal, funding, and other business-related issues, utilize the help of advisors and mentors as much as you can to get feedback and wise counsel and to help you meet important contacts.
Once you have started saving money, it is time to find a way to invest your surplus amount. Whatever you decide, keep in mind that cutting costs is just as vital as investing in your business.
Stories by Jeff Corwin