The startup phase of a business can be very expensive. Technology, supplies, staff and office or retail space can eat into savings and other resources at a rapid pace.
A prudent way to approach the startup phase is with an eye toward saving and preserving. The money you save in the early stages of your business can be used to seize important opportunities once your company is up and running. Use the following tips to adopt a savings mindset as you launch.
Practice saying the word “no”
Add “thank you” to make the world a nicer place, but be ready to say “no” a lot in the startup phase. A common startup mistake is assuming that the first price you get is the best offer. The reality is that most of the prices you are offered — from freelancer rates to office space and hotel rooms for business travel — will be higher than you should spend. Approach all costs as negotiable and save money on each and every expenditure. All of these savings will add up.
Many of the business services you would have had to pay for five or 10 years ago are now free. In the early days of running your business, strive to get by on the free versions of apps and other no-cost solutions whenever possible. A few examples of free tools include Google Docs™ for sharing, editing and storing files; Basecamp for messaging between employees and tracking different versions of documents; and Free Conference Calling for phone meetings. Popular apps with free versions for common business tasks include SocialOomph for managing social media campaigns, Mint.com for financial tracking, and Stock Control to create reports about your inventory.
Learn to share
Shared office space provides affordable, flexible “housing” for your startup. Accessing these facilities also means you’re working alongside other entrepreneurs who you can talk to and learn from. There are many different types of spaces with a wide range of services and populations, so think through what you need and shop around to make sure you’re not paying for nonessentials. Services like ShareDesk or PivotDesk can help you find the setup that works best for you and your colleagues. Search by team size, type of space needed — open plan or offices — and duration of stay to get a list of available locations, prices and amenities such as access to conference rooms, Wi-Fi or shared kitchen areas.
Many computer shops sell high-quality used equipment with solid service promises. You can contact local computer technology shops to ask about deals and let them know what you are looking for so that they can reach out as equipment comes in that fits your needs. For furniture, buy from stores that sell desks, chairs, lamps, conference tables and other office goods at dramatically reduced prices. These stores typically have a wide range of items — some very high-end — to outfit an office. A quick Internet search will identify nearby used furniture stores in your area.
Do some of your own legal and accounting
Instead of hiring a lawyer or accountant, consult online resources like Docracy, LegalZoom or USLegal for step-by-step help with legal documents such as Articles of Incorporation, trademarks or powers of attorney that can be filed electronically. Save more by downloading and customizing forms from one of the many vendors — such as FreeLegalForms.net and Office Depot — that offer free legal documents online. You may want to consider running these documents past an attorney or accountant once they are complete to ensure that you have what you need.
Keep staff costs low
If you can avoid putting people on payroll, do it, because the cost of taxes and other fees associated with staff can quickly burn through funds. Look through Elance, Guru, UpWork™ and other sites to compare rates and find the help you need. If you go this route, be sure you are complying with IRS rules regarding independent contractors, since even a part-time worker can be classified as an employee.
One other means of finding free help is to get an intern from a college or university. Many students are eager to get real-world experience and can provide you with help on some tasks. This solution works best when you have a well-defined project that a student can stop and start, since most students will only be able to devote a limited numbers of hours a week to your work.
Getting your startup off the ground requires tremendous focus and energy, and it can be easy to lose track of budgetary details in all the tumult of those early stages. Keep cost guidelines in mind to save money as a startup and stretch those all-important investment dollars as you create a foundation for future success.Print this article