7 Ways to Setup Your Startup More Cost Effectively

7 Ways to Setup Your Startup More Cost Effectively

No startup can hope to take off without spending at least a little money. However, lavish spending on overheads and running a business without proper budgeting will only lead to instability and disaster. Most small startups depend on investors and loans for their capital and hence they cannot afford to be thoughtless in spending. The success of a business does not depend on how much you spend to run it, rather it depends on how effectively you allocate your budget during the process and how carefully you develop the business towards profitability and sustainability. If you can make some simple adjustments, you can depend less on loans and investors. It’s all about making your business cost effective – here are seven ways in which you can achieve this.

Outsource infrequent tasks

Most people do not like the idea of outsourcing. However, sometimes, it might be necessary – especially for a startup. It might not be possible to outsource everything but you can work to identify the tasks that can be handed over to someone else and outsource them to third party vendors. For instance, if you only print flyers once a year, there is no point in employing an in-house graphic designer – you can outsource it instead. Outsourcing to the right persons or companies can save you time, lower overheads and help you achieve better results.

Cut down on utility expenses

Utility expenses have skyrocketed these days. Just a single land line telephone and an internet connection can cost you around $200 per month. There are some areas where you cannot save on the costs due to a local monopoly on core utilities. However, with regards to telecommunications, you can hope to save on the costs per month by subscribing to a service that offers economic packages. Also, if possible, go for shared office space that comes with utilities included in the rental price.

Introduce telecommuting

Telecommuting is an arrangement that is helping a lot of businesses to achieve greater cost efficiencies. Telecommuting – also known as remote working or home working – arrangements mean letting your employees work from home, coffee shops, the park or wherever suits them. Having a full contingent of employees working 5 days a week from your office costs the business by requiring additional electricity, bandwidth, water, paper, furniture, workstations, computers and other facilities and amenities. By allowing or even encouraging telecommuting companies can experience serious savings on overheads. Make sure to use this option prudently and only in cases where you can ensure the work output of the employees involved.

Consider Four-Day Work Week

Some companies are shifting to a four day work week. The benefits and drawbacks – and which one beats the other – is the subject of much debate. For a small startup the main benefits can be a well rested workforce with more energy to devote to their work after three days off. The idea is that they’ll be more active, creative, happier and productive. Of course, you also get to save on utility bills and facility overheads on the days the office remains closed. Another option is to keep the office open five days a week but have the employees on a four day work week with some working alternate days, allowing the employees to share workstations and other facilities. This allows you to have the same number of employees using a smaller space, saving on rental costs.

Create a strong social media presence

These days there are several innovative marketing channels that will help minimize the spending. For instance, social media is the least expensive avenue to connect with potential clients. In fact, during the recent past, social media has revolutionized the way businesses are marketing their products. Also, the marketing happening over the internet has rendered the conventional marketing methods less viable. Strengthening your online presence and finding innovative modes of reaching out to potential customers can help reign in marketing spending. Don’t forget to ask your customers to write reviews on your products, set up cheap or free email marketing apps and make the most of all the new marketing and sales tech that’s available, often for free or very cheap to micro businesses.

Seek professional advice

Nobody is an expert in everything. As a startup, you cannot afford to experiment with every aspect of business yourself or to gain the necessary experience on a trial and error basis. Therefore it is advisable that you seek professional advice on certain topics. For instance, if you are not an expert in payroll and tax, you will almost certainly make costly mistakes unless you consult bookkeeping and accounting specialists. By taking advantage of others’ expertise from the outset you’ll save time and money as well as safeguard the reputation of your firm.

Organize expenditure

The success of every business depends on it being professionally organized. It’s essential to organize every aspect of your business in the best possible way in order to increase productivity and avoid wasted time, effort, equipment, resources and money. A large part of this is in ensuring that you don’t over purchase equipment or even consumables. Do you know how many keyboards are in the store cupboard? Do you really need a 200 coffee pods for the fancy coffee machine or 10 boxes of printer paper? Buying in bulk is one way to save but so is buying only what you need when you need it. Overstocking can lead to waste and lack of care of equipment because, after all, “there’s plenty more where that came from”. Nor will it aid in the promotion of eco-friendly, sustainable practices.

Takeaway

Every startup must focus on reducing expenses and implementing cost-effective practices at every level of operation. Even after the initial boostrap stage it’s important to keep costs in check if you want to achieve stability and growth. So, implement the points discussed here and gain a firm footing for your business in today’s competitive atmosphere.