7 Ways To Help Your Startup Business Save Money
It doesn’t matter how fast you grow or how successful your funding rounds are, most startups are going to find themselves looking at a lean period. Knowing how to help your business save money will increase your staying power.
It doesn’t matter how fast you grow or how successful your funding rounds are, most startups are going to find themselves, at some point, strapped for cash, or at least looking at a lean period. You have limited resources and big dreams, but you need to budget to achieve those ambitions. While you don’t want to cut corners, knowing how to help your business save money will increase your staying power.
If you want to build your startup’s financial foundation, keep some of the following tips in mind.
Be Smart About Your Solutions
You don’t need to solely rely on your personal know-how to build your startup. From web design to marketing to financial planning, there are plenty of online platforms and services that can provide you with the starting point to build your business. You don’t need to pay out the nose for a boutique solution or hire a new “ninja” to address every challenge — you can use existing free tools or software, tap your in-house talent to work on some things, and outsource others.
Don’t skimp on essentials, but also don’t burn through your cash runway before you’ve even gotten off the ground.
Skip the Cliche Startup Culture
No one’s saying that your workplace has to be a joyless corporate environment, but you probably also don’t need a ping pong table before you’ve got your first customer. Don’t shell out for lavish amenities right away, and consider keeping costs low by encouraging a healthy work environment and flexible schedules rather than. Treat your staff well with good benefits and a decent working schedule, not spendy displays.
Allowing for employees to work remotely, especially, is a great way to keep costs down and allow your team to maintain some critical work-life balance.
Automate Where You Can
Automation is still a long way away for a lot of aspects of business, but when it’s possible to have a piece of code or the right tool take care of a problem, it will increase your efficiency and keep your costs down in the long run. Everything from meeting setting to billing and invoicing can be partially automated with the right solution, so make sure you’re exploring all of your options before you let something get away from you that could be set and largely forgotten.
Invest in Financial Services
Your startup can’t run without cash flow, and while it might seem like you can’t afford to put money aside just to make sure that you’ve got money to put aside, a qualified financial advisor or just someone to keep track of your books can help you plan, make sure that you’re anticipating important business events and milestones, and ensure that future funding rounds or equity opportunities are fully realized.
Even if the benefits aren’t realized in additional revenue, you’ll be glad you had someone watching for pitfalls or errors and making sure your startup is staying on top of taxes and other legal obligations.
Don’t Commit To An Office Space
While it may be tempting to commit to your dream office space early in your startup process, don’t. Ideally, you want to wait to move your startup into an office until you have more than 15 employees and a steady stream of income.
Many startups accidentally burn their budgets finding an office space too early in the foundational process. Instead, work from home or in communal spaces until there’s enough flex in your budget to start lease-searching.
Note, too, that you’ll need to consider the costs of desks, chairs, electricity, additional utilities, security, and the all-important coffee when searching for an office. If you want to wait to move your business into this official capacity, do so. Your budget will thank you.
Be Smart About Hiring
While you don’t want to stiff any potential future employees, your startup budget is going to be tight. You want to make sure that every hire you make is essential, and if you don’t have the budget, consider outsourcing or contracting someone with the right skills. Outsourcing is expensive in the long-run, so be smart, but committing to the wrong hire can slow you down.
If you really want to invest in a full-time employee, this is a good time to make sure of long-term payment structures dependent on future growth, like equity or other future options. This will make sure that your future employee is committed to the success of the startup and make sure that they share your vision for the company.
Communicate With Your Customers
Early in the startup process, your customers should be excited to see what kind of work you can do for them. If you’re collaborating with the right crowd, you may be able to discuss payment structures and agreements that lock in revenue — if you’re making the right deals, you can accept a lower rate or offer a bit more to the right people if it means being able to plan your budget accordingly. Making sure that you’re a good fit with your customers is just as important as making sure that your employees are a good fit as well.
It’s the frugal, creative mentality that makes working with a startup so engaging. You know that your finances won’t always be this way, but until you can make concentrated investments, you need to rely on your wits to carry you forward. Budget carefully, and keep the above in mind, and you’ll find that your startup will move into the black in no time.