By Brooke Chaplan
Starting a business on a shoestring budget means you have must accomplish a lot with only a small amount of cash. Even with realistic business plans, you might discover that expenses accumulate faster than anticipated, sending cost cutting to the top of your priorities list. The following tips will help you control costs so your startup can thrive.
Start at Home
The cost of office space might surprise you, especially if you live in a crowded metropolitan area. Bypass the massive cash outlay needed to rent or buy a facility for your business by starting at home. You might have trouble dedicating your garage or a room in your house to your work, but if you do it, you’ll have a place to work that doesn’t demand cash. You also get to write off the cost of the space you use on your taxes.
Unless you’ve started a venture that requires a lot of specialized knowledge, you probably have friends and family members who can assist you with your new enterprise. Offer them equity in your business in exchange for their work, and you’ll get the help you need without taking advantage of your relationships. Meanwhile, the people helping you can give you valuable feedback that can help you improve your business model.
You can spend much time and incur substantial expenses while developing your product or service. You need to generate revenue, so get your product out as quickly as possible. When you have a product or service that people will buy, you can use your revenue to fund future development.
As the needs of your startup become apparent, spend your money on the projects, equipment, and supplies that will create the shortest path to revenue. Avoid the traps that jeopardize startups that cause you to spend money on things that won’t directly benefit the company. For example, you probably don’t need to spend a lot of money on a break room for your employees when you could spend the money on materials required for production. You can also save a lot by investing in low-cost energy so you don’t end up paying for tons of electricity or gas bills. Places like Lumo Energy can help compare prices on packages so you make the best choice possible.
Your business needs money to grow, so conserve your resources by reducing the cost of your facility and getting help without bloating your payroll. Speedily get your products and services to market, to generate cash flow and only spend money on things that generate worthwhile returns on investment. Thinking and spending smart will give you the startup success that you deserve.
Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most her time hiking, biking and gardening. For more information contact Brooke via Twitter @BrookeChaplan.