If you are starting your own business, you will know how difficult it can be to handle all costs. Cutting parts of your expenses here and there can greatly improve your monthly profit. So, be smart with your money.
Here are five tips on how to save costs in the very roots of your business:
- Work from home / virtually
If your business doesn’t need an office, then don’t have one. You can work from home and stay in business, as today connections are performed mostly by the internet. You can arrange a space inside the house, but even a shed in a backyard can be wired up for work with little effort and creativity. Not only you will be relaxed, but you will reduce many of your costs like paying rental, heating, technology and supplies.
Another financial benefit is that you cut your commute costs.There is no train tickets or gasoline bills. Wireless communications have pretty much paved the way to allow more and more people to work from home and cut down on commuting costs. And if you need an office to send/receive mail to, look into a virtual office service – you can even set up a home base in cities like beverly hills or los angeles.
- Minimize time waste – Time is money!
The best way to save time is to track it for a while. A couple of weeks should be enough to give you a complete insight into points in a business where you have most of the time leakage.
Going to a post office to send mail or packages can be time-consuming if you have to do it often. Buying or renting a franking machine will not only save your time but also prevent you from guessing or overpaying the price of the mail or packages you need to send to customers. You can prepare a letter or package whenever you need it from your office, without a need for a Post Office to be open. There is a large variety of types of franking machines, and you can check franking machine prices here.
Meetings can also be very time-consuming. Compare time spent on meetings with efficacy and benefits that those meetings have brought to your business. Reducing time spent on meetings which don’t add value to your business can save you money and provide you the time which can be spent on other activities which are profitable.
- Hire freelancers and capable employees with little work experience
Hire in-office employees only if necessary, because having permanent employees means you must provide work continually so that their productivity is more than what is being spent on them. If you don’t have as much work, you can hire part-time employees, but hiring freelancers and having home-based employees is a good solution for startups. Additionally, if you hire freelancers, you cut costs of management, training, and benefit packages of permanent employees.
If you still need permanent employees, you can hire capable employees with little work experience who are willing to learn and work well for a lower salary than experts with great work experience.
- Use barter
Bartering, or exchanging products and services is one of the excellent ways of saving costs. It has evolved into a sound strategy for finding goods, conserving cash, trading services, locating excess production capacity and moving inventory. It helps to expand your professional network while getting the things you need for your startup at the same time. Again, it may take a bit more time and effort to find a company you will barter with, but on long terms, it will save you money.
- Use Free Software
Today, in the era of the internet it is easy to find different free software to run your business. There is no need to pay for bookkeeping, word processing and presentations because you can find an open source or cloud version for most things you need to do. There are various available programs which can help you manage your finances, track your customers, plan your projects, and much more. Also, do not hesitate to use free trials of software to determine if you really need it.
You can’t overlook your finances either. Understanding concepts such as burn rate and startup runway are important for budding entrepreneurs, so make sure you know what they are and how to calculate them. A lack of cash flow is a common cause of many businesses downfalls.
These are just a few suggestions for cutting costs of your startup, however, as you run down the road of having your own business, you will discover that there are numerous other ways to improve your monthly profit and keep your company running on long terms!