If you have decided to start your own business, congratulations. This is going to be an exciting journey, and hopefully a rewarding one too. However, a large proportion of start-up businesses cease trading in their first year and many companies find that their start-up costs were more than they expected. This hurts them financially, especially if sales were lower than anticipated and the business folds before it really began. Making sure that you aren’t one of these statistics can be difficult. Read this guide for tips on how to keep business costs down when starting a business.
Workspace
It would be lovely to set up your office in a high-rise building with lots of windows like those you would find in a major city. However, it is better to start small even if you dream big. Depending on what type of business you are starting and how many staff you will need straight away, it might be best to work from home for the first few months. This will keep your costs down and you can always upsize as you grow. It will also save you the cost of commuting. If this isn’t practical, then many hotel chains or coffee houses will allow you to work from their space if you keep buying their products. If you were likely to treat yourself to a latte anyway, this could be a great option.
Many large buildings house multiple small or start-up companies. It is worth researching to see if there are any in your area that you can rent. The prices are low as every company in the building shares the utility costs, and this is a good option if you are going to need to employ people from the outset.
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Don’t Buy Non-Essential
As consumers, we have trained our minds to buy in bulk. This is good if you know you are going to use the supplies as you usually get a discount on the price for bulk buying. However, when you start a business, you are unsure of how well it is going to go or what supplies you will need. You will find yourself needing more of some things than others. To keep your monthly expenditure down, only buy the essentials and only make purchases when you need to. That expensive coffee maker might have to wait but you can add it to your dream list.
Shop Around
Shop around for the things you need as you may find special offers or discounts available to you. This will keep your costs down. You may also get a discount for running a business, so it is worth asking the question.
Don’t be afraid to shop for second-hand items if they are in good working order and it is cost-effective to do so. Many budding entrepreneurs want the best of the best but don’t get tempted to join them if you want to keep costs down. Second-hand furniture can be found in larger thrift shops and can look great. Most companies don’t update their office furniture regularly anyway, so this won’t reflect badly on your business.
If you are welcoming clients into your office frequently, you may even find that older-looking furniture is good for business. Nothing says ‘start-up company lacking in experience’ like a cellophane-wrapped desk, and this could put off potential clients.
Second-hand IT equipment can save you a fortune but make sure that it works properly and is fit for purpose before you buy. A company that specializes in reconditioning IT equipment and comes with recommendations is probably a good place to start looking.
Ask for a warranty for the equipment as a good retailer should be able to provide you with one for at least a year. That way, you know you won’t have to go shopping again for a while.
Use Social Media
Some new businesses spend a fortune on their advertising campaign only to find that it doesn’t result in as much business as they thought it would and they are out of pocket. Don’t spend money you don’t have as this can lead to problems. Instead, make the most of free advertising on social media.
Most towns have local websites where you can advertise your products or services for free on a couple of days per month. If you are a member of any online groups, use this to create interest. To reach a wider audience, join national or international groups who are likely to be interested in your products or services. Don’t forget to check their business advertising rules though as some groups have restrictions. You can start planning a bigger advertising campaign to use when your business is bigger.
Social media is a great way to advertise for employees for free once you start expanding too. Job boards can be expensive but there are several free job sites you can join on social media. This works especially well if you are looking for entry-level employees rather than specialists.
Outsourcing
Outsourcing is a fantastic way to get specialist staff without having to pay a fortune for them. You can find outsourcing support for functions such as IT, legal, accounting and HR among others. For a closer look at what outsourcing HR entails, visit G&A Partners. The great thing is that you only have to pay for as much of the service as you need. For example, if you only need an accountant to put together your end-of-month figures then outsourcing this function means you don’t have to pay someone to sit around twiddling their thumbs for the rest of the month or go through the hassle of doing it yourself.
There are ways to keep your costs down when you are starting a business, so it doesn’t have to cost you a fortune. Think carefully before you make any big purchases and use this guide to help you to keep your costs down in the first year or so. Good luck in your venture.
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