When launching a new business, it is vital that you do not spend huge sums of money on getting your business off the ground before you have any money coming in. Of course in most cases, spending capital and start-up costs are inevitable as a degree of spending is required to develop a business. However, there are ways to drastically minimise initial expenditure, so that you have more capital to keep your business afloat during those all important infancy months, which we have outlined below.
Huge Savings on Premises Costs
Depending on the size and nature of your business, you will have to have some sort of premises. Although purchasing property is a good investment it is also risky. Rather opt for a favourable rental contract. If you require a single work station, consider working from home to reduce costs or alternatively make use of a serviced office space or virtual office. If working from home, ensure that you have permission from the appropriate authorities.
Equipment is likely to be a massive startup cost, and like your premises, it can be rented instead of bought. However, if you feel that renting is not an option, opt for second hand as opposed to new goods. A great way to pick up valuable yet inexpensive equipment items is to go to auctions. Often insolvent businesses have to release all stock and equipment and with a bit of luck you could walk away with a real bargain.
Wear Many Hats
A great way to save on startup costs is to take on different roles in the business. We do not mean stretching yourself out thinly, but rather identifying a role or a task that you could easily do yourself, where the only thing it will cost you is time. For example, instead of hiring an accountant, consider doing a short course in bookkeeping in order to do the books yourself. If you are a delivery company, consider doing some driving yourself. This way, you will also learn about the many different facets of your business, which is important as an entrepreneur. As the business grows in profits and complexity, you can enlist the help of professionals.
Don’t Buy in Bulk
Buying in bulk usually results in small savings on large volumes of items, which can ultimately affect the bottom line. Although it is tempting to buy in bulk, you also must consider your cash flow. Is it necessary to buy such large volumes when there is little or no money coming in? On this note, in order to effectively reduce startup costs, always ask yourself whether a particular expense is necessary before purchase.
Penny Munroe is an avid writer in business related news and tips. Articles include tips on sourcing ideal offices for rent to search marketing tips for small businesses.