Although starting up your own business enterprise is exciting, one thing which is not exciting is the cost of doing so. Start-ups are among some of the most expensive small business endeavours to get going — office space, sales software, inventory, furniture, taxes, wages, computers and contractors all need to be paid and, in many cases, are all part of a start-up business’s early costs.
There are many ways you can minimize your start-up expenses, though, without compromising on quality of the work done. When it comes to starting up your business, it is best to invest in quality, whether that be paying a renowned contractor to carry out a proper job or investing in quality security software for the computers which will store your company’s data. Here are our tips:
Use Freelancers or Contract Workers
Although you will want and need to hire full-time staff at some point during your start-up’s lifetime, you can start out by hiring contract workers and freelancers. This can help you save a lot of money as you are only paying for services which you need and are not paying staff a full-time wage.
Although it is always best to have dedicated full-time staff, it is not always feasible. Contract and freelance workers are a fantastic way to reduce your initial costs when you are starting up your business, and it can provide you with time to work on the high-priority tasks instead of focussing on your staff.
Everybody loves new things, but does your business really need new furniture and technology? You can probably get by quite easily during the early days with second-hand refurbished computers and furniture. Hardware is very expensive, but a reliable computer does not need to set you back a thousand dollars.
Factor in hardware and technology for additional employees and these costs begin to take off. Software developers will need dual screens, designers will need powerful computers and your marketing staff will probably want company-provided phones. Although new hardware is ideal, it is not essential during your start-ups early days.
Prioritize Your Costs
You may well find that some of the things you thought were essential start-up costs actually aren’t; create a list of all the items your start-up absolutely needs and work through it. Come up with a budget which takes into account all of these necessary items and start to purchase them, buying second-hand where possible.
By creating a concise list of all your needed items, you will start to eliminate things which you would have bought but may not have needed. Do you really need that fancy office chair, for example? Sure, it would be nice, but the niceties come later. Purchase only what your start-up needs to get going.
Keep Track of Everything
You should be keeping track of your expenses from the get-go. As the operator of a start-up, it is your responsibility to know where your money is going and keep track of every transaction which takes place in the name of your business. From the purchase of equipment to the payment of contractors, any business-related expense is important to note down and keep track of, regardless of how small and insignificant it may seem.
An accountant can help you out here and is probably your best bet for having an accurate record of your finances. Although you have to pay an accountant, view it as an investment to save you money in the long-term.
By having a record of all your purchases, you are able to see exactly where your money is going. Not only does this provide transparency, it can help you figure out where you could be making savings or deductions, and help you cut down on unnecessary business-related costs — you don’t have to be buying your business partners lunch each time you meet!