Running behind your passion and making it come true is not for the faint-hearted. It takes a lot of hardwork and will power to leave your 9-5 job and start your own business.
Small and lean businesses are great until the expenses go overboard.
The entrepreneurs face a lot of hurdles while moving their business ahead, one of the main struggles being cash flow.
This is no secret that many start-ups come down crashing due to overloaded expenses. And, then some expenses aren’t even necessary.
Therefore, as a entrepreneur, it is necessary to know all the differences to make the right decisions as in the beginning the expenses are bound to be higher.
Nevertheless, there are certain sure-shot ways in which you can cut your operating expenses.
10 actionable tips to ease the financial burden:
1. Pre-owned Purchases
You can be excited to start your new business and want to be on the top of your game even in the terms of equipment.
As it seems a great idea to buy new equipment but consider buying the pre-used ones to fulfill your needs.
In case you’re buying electronics, there are several markets that sell old devices for a lower price.
The same goes for machinery and vehicles as well. And, you can crack a much better deal as well as save a lot of money.
However, do evaluate the quality so that you don't have to compromise on it.
2. Yes to Lease
Your startup might require you to buy equipment, but you can consider leasing instead of purchasing. It offers added benefits, like saving money!
For instance, if you're buying costly equipment, chances are that you have to make a down payment and get a loan for the rest, sounds convenient so far?
But, the loan interest rates being high. Hence, make a smart financial move with leasing!
3. Keep a check
Remember that you’re the boss. So, without any sort of negligence, keep a track of all expenses from day 1.
Starting from the supplies, marketing, furnishings, equipment, employee benefits, to all the tax, and legal consultations, check every expense.
It is important to audit your overall expenses to check if there’s anything that could be operated at a lower rate or even without.
Don’t forget to keep the receipt. This way you can easily manage, organize, and deduct unnecessary costs.
Thanks to the digital age, you can subscribe to an online inventory management app that integrates with your accounting software. It helps you to manage all shipments, orders, payroll, and other activities under one roof.
4. Outsource some processes
Does your start-up involve some tasks that require minimal skills but consume a lot of time?
If yes, then consider outsourcing these tasks from a third-party provider. Some areas where you can outsource are:
- Software development
- Content Marketing
- Graphic Design
- Data Mining
Numerous third-party service providers offer commendable and of course, affordable services.
5. Smart hiring
Similar to the other planning schemes, plan out your staffing costs.
A start-up involves many people. Therefore, outline the staff needs and the team expenses in advance.
Let’s be honest, in the beginning, you cannot hire a lot of staff as you need to keep a check on your savings. So, if you’re unsure about the number of employees you need to hire, check with the expert hiring contractors.
It is necessary to evaluate both the necessity and the value of the hired employee.
6. Go Paperless
Sounds impossible?
But with a proper plan and technological involvement, it is indeed possible!
Moreover, think about the money you could save by not using paper.
An office requires loads of paper reports, receipts, documents, and invoices. Also, maintaining printers is expensive, so it is wise to replace paper and printers by going digital.
This way you can help save the environment as well.
Plus going digital has several benefits like:
- Faster payment
- Swift customer service
- Easy knowledge sharing
7. Evaluate the office space
Office space is one of the major areas that drain an enormous amount of money from start-up entrepreneurs. So, even if you’re thrilled to own shiny, polished office space, consider the alternatives.
Check whether or not your team can work remotely. The digital landscape has made the collaboration between remote teams much easier.
There are tons of remote workers who communicate and coordinate with each other online.
Moreover, the concept of co-working spaces is a thing now. Not only are they feasible but also cost-effective! You can expand your business by cutting down on huge buying expenses.
8. Get Insured
To a new business owner with a tight budget, insurance might seem like an unnecessary expense. But insurance is one of the most important expenses that must never be neglected.
Your business, new or established requires financial protection in several areas. So, make sure that you do not skip on this aspect.
9. Buy in Bulk
While cutting down on the purchase is recommended, but there are times when spending in bulk is the right thing to do. This includes office supplies, product materials, software licenses, and also service arrangements.
These are the things that tend to grow over time. And, while you think it to be excessive, you may find that a bulk purchase makes more sense.
Take the time to check and compare the prices. In this way, you can also build some solid relationships with the vendors who can offer you additional discounts later on!
10. Build partnerships
You’re not the only start-up business in your city. There are many out there struggling with similar financial issues.
So, it is a good idea to form partnerships with other entrepreneurs in your area and trade things to cover up each other’s expenses.
There’s no harm in seeking help, isn’t it?
This could be mutually beneficial when driven with the right approach.
