Starting a business is an expensive endeavor. You have to consider the cost of equipment, stock, employee salaries, and all of the other overhead expenses that accompany your particular brand. It is paramount that you find creative ways to save money on your new venture. If you aren’t sure where you can cut costs, here are a few expert suggestions on how you can save a few dollars right away:
Evaluate the Necessities
Do you know where all of your money is going? Many business owners find that they can drastically cut down on their discretionary spending if they make a conscious effort to do so. This might mean eliminating coffee in the break room, cutting back on purchasing lunches for the company, and eliminating office celebrations. By cutting back in some of these key areas, you might find several hundred dollars each month that can be reinvested into your business.
Purchase Used Equipment
It can be tempting to choose that brand new copier or the latest computer systems. Many people want to go for top-of-the-line products when they start their new business. They justify these expenses as an “investment” in the future of their business. While this can certainly be true, you can save some money when you first start out by purchasing used equipment. You can always upgrade later on down the road when you have more funds at your disposal.
Outsource Some Tasks
Sometimes, you might need a little help with just a single project. Whether that is designing a new advertisement for a marketing campaign or writing a jingle for a radio advertisement, you might not have enough work to keep a full-time or even a part-time employee busy. Consider outsourcing some of these tasks through popular freelance sites instead of hiring a local employee to join your team.
Barter for What You Need
It may not work in every situation, but there is a good possibility that you might be able to barter with other businesses to secure what you need. Think about what services you can offer and propose an exchange with other local business owners. Make sure that the trade is even, and you will have more success getting others to agree to your terms. It may be hard to match up with another company at first, but you will eventually get the hang of this particular skill.
Buy in Bulk
Do you know that you are going to use a lot of certain items? If you have the capital to invest in your business, then you should really consider buying in bulk. Work out an agreement with your supplier to get a hefty discount on a substantial order. If your supplier is not willing to negotiate these terms with you, then you might want to consider finding a supplier who will.
Use Free Software
Investing in software that keeps your business running might be more expensive than you think. There are a lot of terrific programs out there that offer fancy features, but there are an equal number of programs that are available for free or are quite inexpensive. They can still help you manage your finances, keep track of customers, and plan out your future projects. You can always upgrade to a more robust system when the business can afford it and justify its purchase.
Build an Emergency Fund
You never know when something is going to go wrong in your business. One of the best ways you can make sure that you don’t get put in a bind is to set aside savings in an emergency fund. Ideally, it should have about six months of operating expenses.
Eliminate Credit Card Debt
How much do you spend each month on debt payments? Between credit cards, auto loans, and even mortgages, you probably spend several hundred dollars each month repaying your debt. David Moffatt, the owner of 4 Pillars Halifax, stresses the importance of eliminating debt before diving headfirst into your new business. He believes in saving hundreds of dollars each month in debt payments and instead investing that money right back into the business. These funds can help pay for new equipment and assets or cover the salary for that new employee.
Get Business Insurance
When your business is just getting started, most people are hesitant to pay for anything that they deem extra. Unfortunately, this means that many people slash their spending and decide not to invest in business insurance. Do not fall victim to this mindset. Business insurance can actually help save you money in the long run by helping to protect you from unexpected disasters.
Pay Attention to Financial Statements
It should go without saying, but a new business has to be very conscious of just how much they are spending. Take the time to analyze your company’s financial statements and determine where you might be losing money. If you don’t feel equipped to look over the statements on your own, consider investing in a professional accountant or bookkeeper who can give you guidance and help you set realistic financial goals for your business.