How to minimise costs when starting your own businessPosted on Thursday, August 11th, 2016 | Flexible Offices
Why keep your start-up costs down? Well, firstly you’ll have to make less sales to breakeven. Secondly, if you need to borrow money to start your business, it will mean taking on less debt, which will put less strain on your cash flow.
In any case, limiting your costs is a great habit to get into from the start. Minimising your costs, together with maximising your margins, is key to keeping your business as profitable as possible.
Much will depend on what type of business you’re starting, but these days it’s possible to start a business with little or no money. Many successful businesses have been started with shoestring budgets.
If you can run your new venture from home, it will dramatically reduce your start-up and running cost. You may choose to use a virtual office, to create a more professional and established perception of your business. However, some people prefer to keep their business and home lives separate, while many businesses simply can’t be run from someone’s home, so premises are a must.
Location is vital to many start-ups, especially those in retail. Think carefully about whether a location will put off potential customers and possibly even employees. Compromising on location might save you money, but caution is advised, especially if your business will rely on footfall custom. And while taking less space can save you money, it can hamper your business. Cramped conditions could soon put you, your staff and your customers off.
Put your negotiating skills to good use when seeking the best deals on all the things you need to start your business (including utilities, insurance, phone and broadband). Shopping around for best prices could significantly increase your business’s chances of success. Every penny saved is worth it, so find out what credit and discounts are available from potential suppliers.
Don’t buy anything unless there is a legitimate business reason. Be resourceful. Borrow if possible. Buy second-hand (auctions can be good for cheap office furniture). Explore barter deals and swapping skills with other businesses.
Create your own brand. Use your home computer until your business can afford to buy one. Use it to research your market, design your logo and business stationery, leaflets, posters, signage (keeping it simple is advised). Creating your own website could also save you money. If you’re going to get someone else to create your website or design marketing materials, set an affordable budget and stick to it.
Don’t fall into the classic start-up trap of wasting money on advertising. Make best use of no-cost advertising, such as putting a card up in a newsagents’ window, or even just good, old-fashioned word of mouth (simply telling people you’re about to launch can attract customers). Get out there and speak to potential customers.
Social media can be a cheap and effective marketing tool for startups on a tight budget. You need to plan your approach and focus your efforts on social media platforms used by your potential customers.