Starting a new business requires plenty of time and money. However, don’t let the costs deter you because you can start a business even if you’re on a shoestring budget. Here’s how to reduce your startup business costs by maximizing your resources while you minimize your expenses.
1. Set a Budget
Gain a clear view of your business’s financial needs when you write a list of your expected income and expenses. Your list will depend on the type of business you operate. For example, your expenses would include an e-commerce site for an online business or rental space for your retail company. As you review your list, create a realistic budget that cuts as many expenses as possible and increases the profitability of your business.
2. Consider All Income Sources
You might be surprised at how much money you do have for your new business venture. Start with your savings. Then consider if you can sell anything for extra cash. Next, investigate loan options. Many banks and credit unions offer affordable small business loans. You can also check with investors who may infuse your business with cash in exchange for a portion of the profits. Don’t gamble with credit cards.
3. Rethink Family Loans
While your family and close friends may offer funds to support your business, carefully think through the cost. Weigh what could happen if you don’t follow your loved one’s business advice or can’t repay the loan. You don’t want to jeopardize your relationship simply to get your business off the ground.
4. Prioritize Expenses
Commit to spending only what you have to, which you can do when you determine what you need, want or can wait to buy. For example, you may decide that you need a website, want an advertisement wrap for your company vehicle and will wait to develop an app after you’re in business for a few months. Divide expenses into these three categories to boost your startup capital and cut costs.
5. Start Small
The latest tech gadgets, boxes of inventory and multiple retail locations support your successful startup, but you may not need these expensive investments. Instead, maximize your budget when you start small with the bare minimum. Then upgrade slowly as you can afford it.
6. Do It Yourself
Until you get your business off the ground, keep your staff roster light and try to do as many tasks as possible by yourself. You can also hire freelance or contract workers to handle administrative, bookkeeping or marketing tasks. While you don’t want to burn out, you can save money by not hiring staff until you’re more established.
7. Buy Second-Hand Items
To furnish your office, fill your bakery or produce videos, buy used equipment and other items. Check out estate, warehouse and surplus sales plus thrift and consignment stores for quality merchandise at discount prices. By saving even a few dollars, you stock your business with the essentials without breaking your budget.
8. Build a Website
Whether you operate a physical or online store, you need a website because customers want to interact with your brand online before they make a purchase. Your very first website can include a bio, products and services page, and contact information. As you grow, add pages for testimonials, photo gallery, and FAQs.
9. Utilize Social Media
Boost your marketing budget with social media presentation, a free and effective tool. Set up a blog on your website and business pages and profiles on Facebook, Twitter and LinkedIn. Then post engaging, high quality, relevant, and optimized content, such as news stories, how-to video, and original graphics. Because the goal of social media is to build relationships, brand awareness, and goodwill, limit sales posts to 20 percent of your social media strategy. A consistent and value-oriented social media strategy successfully markets your business and costs very little.
10. Focus on Customer Service
Customers appreciate when you go the extra mile, so always look for ways to provide an excellent customer experience. Offer complimentary gift wrap services, deliver projects a day early and mail birthday coupons. Also, handle complaints promptly. With quality service that puts your customers first and makes their lives easier, you invite repeat sales and positive word-of-mouth recommendations.
You can make a shoestring budget can work for your startup. Use these tips as you launch your business to save money and boost your chances of success.
Editor’s Note: This article is part of the startup tools blog series Start Your Business brought to you by the marketing team at UniTel Voice, the virtual phone system priced and designed for startups and small business owners.
