Launching a startup is an investment in itself. Yet, as many startup founders soon find out, the expenses don’t end there but just keep piling up. So, what can a first-time entrepreneur do to stop the bleeding? Well, for one, you can work on reducing your business’s operating costs and improve your workflow. How, you might ask? Simple, just take a look at these four tips below.
Lose some (dead) weight
Your startup is like a tiny life-boat; if you stack too many people on it, you’ll sink. Hence, to stay afloat, you first need to lose some weight. For starters, never hire people on a permanent contract straight away; otherwise, you may end up with lots of dead wood. Instead, look for young talent, and always on trial contracts until you find the right fit. Likewise, be extremely careful with your selection, as a high employee turnover will eat straight through your budget if you make the wrong choices. This, and the training and the re-training of employees, will make the biggest dent in your budget. To lessen some of the strain, you can always outsource some of your non-essential tasks and cut operating costs that way. In addition, try using a more remote workforce to save on space (and rent) as well as equipment.
Optimize your office space
Speaking of space, some businesses—especially those in the retail sector—have to sacrifice big chunks of their office space just to store valuable merchandise and supplies. As a result, you have to pay bigger rents and leases to accommodate such a vast inventory. Now, by implementing some clever office storage solutions, you can re-organize your office space, reduce overhead costs, and increase productivity. That way, you’ll give yourself, and your employees, some more breathing room, and your office will cease to be a warehouse. Additionally, you could also work on the general layout of your office to find the most optimal design for your business needs. The more you optimize it, the more efficient it’ll be; and, therefore, cheaper to maintain.
Leverage the use of technology
There’s a reason we no longer use stone tools and flint axes. Nowadays, we have technology at our disposal that not only makes things faster, but more efficient as well. Despite this, a lot of new startups fall into the trap of doing things the old-fashioned way—losing precious time and money in the process—with the excuse that new software and hardware is expensive. Well, it doesn’t have to be. There’s a plethora of free apps and programs out there, ranging from accounting to project management, if you know where to look. In essence, smart software usage can help small businesses streamline workflow, reduce staffing costs, and improve both internal and external communication.
Performing elaborate marketing campaigns can put a serious strain on your budget; paying lavish marketing agencies even more so. Instead, you ought to trust your guts and become your own marketer. After all, who knows your customers better than you do? Now, some of the things you can dabble in on your own include: social media, content marketing, giveaways, email marketing, SEO, and so on; it just takes a bit of practice. Additionally, you can even ask your customers for feedback and reviews to gain more insight into what makes them tick. This is a cheap and effective way of conducting market research and finding the right kind of strategy for your particular target audience.
At the end of the day, you need to be more sensible with your money. Do an audit to determine the bare minimum required to run your day-to-day business operations and tailor a budget around that figure. Don’t be stingy, but don’t get carried away either; try to find that middle ground. Re-invest the acquired funds back into your business; rinse and repeat.