3 keys to saving money when starting out in business
A business is a living, breathing thing — an entity that, like a person, you can love, nurture and grow, or neglect and eventually let die. If you own a business, you understand that you must care for it like a newborn child. You must nurture it and carefully provide the essentials, for if you fail, your business will fail as well.
Like starting a family, starting a business takes a very serious financial commitment. If you are like most new business owners, money is tight; every dollar counts and you have limited resources.
Yet you can start and grow a very successful business by being resourceful with your limited cash and by being clever with your start-up capital. Follow these three keys to saving money when starting a business, and you will run a lean business that will have every chance to grow and be successful.
1. Utilise free marketing
Use social media
Use all the free social media platforms available to publicise your business and everything that you do within it. Set up pages on LinkedIn, Facebook and YouTube to post content to the world about you, your products and services and why you are different to your competitors. Don’t forget to trawl back through all your contacts, including business cards you have kept, your email address book, and family and friends and add them all to your social media contact lists. Then send friend and connect requests, and invite everyone you know so you can quickly build an online presence for your business. If you don’t blow your own horn, no one else will.
Mention your business
When you meet new people, them what your business does and the benefits it creates for its customers. Don’t try and hard sell your business or be pushy with people, but make sure that you weave your business story into every conversation. This includes in a social context or when you talk to suppliers and potential customers. Have a business card ready at all times to give to them, and try and get one in return.
Create a cost effective website
You certainly do not need to spend tens of thousands of dollars on creating a full-blown website with all the bells and whistles. Just create a simple, but effective website that tells people about your business, the range of products and services you offer and why you do it better than any one else. There are plenty of free online website development packages and tools that allow you to create a smart looking, professional website that can be up and running in a matter of hours, not weeks. Be warned though: if you create a cheap and nasty looking website, then you will send a message to the market that you also have a cheap and nasty business.
Purchase a low run of business cards
Invest in a low print run but high quality business card. There is nothing worse when starting out for the first time and having a cheap looking business card that looks like it was printed at home. Someone once handed me a business card that looked like it had been torn out from a perforated edged sheet of cardboard. It looked tacky and certainly did not leave a good first impression with me. Invest in a high quality but low print-run business card as a cost effective way of marketing your new business. Online business card providers generally can delivery quality for a great price.
2. Have minimal staff
Pay only for what you need
Use contractors or part-time staff that are on a casual hourly rate. This will allow you to only pay for staff when you need them. If there is downtime in your business and you are running around meeting new potential customers, the last thing you want is to pay a large wages bill when your staff are sitting idle.
Also the advantage of having casual staff is that you can roster them on and off to effectively utilise them and only pay them when you need them to help you within the business. If you are paying a casual hourly rate, then you may not need to pay any holiday leave, sick pay or annual leave. Please check with your local authorities on this issue.
Ask family and friends to help you within your new business. Spread the word about your business through your network. Often family members, especially those who are retired, will jump at the challenge and opportunity to break the monotony of their day by helping another family member build and grow a valuable business.
Hire offshore contractors
Use offshore contractors for all your infrastructure and support. You can almost get anything offshored today, from manufacturing to a virtual assistant who can help you with your infrastructure without the cost of having full-time salary and wage staff in your business. From creating cost-effective websites to the full manufacturing of your products overseas, there is no limit to what you can offshore today. It will save you time and money. The world of business is global and business back-office support has also grown into a global phenomenon. Embrace it so you can save money when starting out in business.
3. Save money on location and equipment
Use your home
To save money, consider running your business from home. This is a money saving measure that you must seriously consider if you want to run a lean business, especially in those first, critical months. With small business technology being more affordable and internet access reaching nearly every corner of the planet, you can virtually run a national or even global business all from the comfort of your own home office.
Share or lease
If you don’t want to run your business from home then consider a shared office arrangement or look at renting or leasing a serviced office for the short term. Having a shared office or serviced office gives you the professional “shop front” look and feel, which is important if customers prefer to come to you. Most of these shared office facilities also offer full secretarial support, such as answering the phone using your business name, taking messages and sending the mail. To save money, forget signing up for long-term, expensive office space. Look at sharing an office or business premises or a serviced office as a low-cost yet professional alternative for your new business.
Rent equipment or outsource to conserve cash
Do not buy costly business equipment; instead pay for the temporary use of your equipment or lease it. The key to this strategy, especially if you are starting a manufacturing business, is to produce your product without sinking hard cash into large amounts of plant and equipment. You can certainly outsource your manufacturing offshore for almost any type of product, even with low quantities being produced. Rather than having to invest in capital equipment yourself, lease or rent the equipment or even outsource your production entirely. I know many business owners who have started out in manufacturing for the first time by finding a larger manufacturer to make their products for them. They even get shipping done by someone else as well. This is a great idea and a key strategy to keeping your manufacturing costs to a minimum.
Don’t make the mistake of running up business costs and burning through your cash when you start your business. Most new businesses fail in the first 12 months because their owners ignore these critical keys to running lean and minimising costs at the start. Save money where you can while starting up.