The biggest hurdle you’ll face
when you launch a business is that you’ll have to quickly earn a cash flow
before you run out of your initial funds. The less money that you spend from
the get-go, the more time you’ll give yourself to secure a profit and keep your
business going.
Of course, minimizing your
business costs is a lot easier said than done. Follow these tips if you want to
reduce your startup’s spending.
Outsource Work
It’s convenient to run all of your
business’s departments in-house because it makes for better communicativeness
and speedier turnarounds. However, that also means that you’ll have more
salaries to pay, which is going to drain your funds more quickly. In the early
months of your business, it’s best to put as much of your money as possible
towards marketing and quality-control.
There are several departments that
you can easily outsource to third-party agencies, and you’ll often pay less for
these services than if you were to hire in-house employees to perform them.
Here are a few departments you can outsource:
- HR: Your
startup is bound to have fewer employees, so there’s less likelihood that your
employees will have HR conflicts. An outsourced HR company can manage small
conflicts and also provide automatic payroll services. - Marketing: It’s important to have a Marketing Director at your company, but you can
outsource marketing jobs like copywriting, graphic design, website building,
and social media advertising. - Tax Preparation: Business taxes are always more complicated than personal
taxes, so it’s best to let a tax preparation company file your taxes so you can
put more time toward day-to-day management and business development.
It’s the goal of any company to
grow large enough to bring these departments back in-house. But when you first
launch, you can save a lot of money by just outsourcing them.
Use a Remote Workforce
An office is one of the most
expensive costs for a startup business. If your employees mostly do work over
the computer, you might consider letting them work remotely. With a remote
workforce, you won’t need to spend money on a larger office space—and you might
not even have to spend money on an office at all.
Some business owners are nervous
about managing remote teams because they’re afraid
their employees might not be as productive is left unsupervised. But there are
several ways to ensure your employees are getting their tasks done efficiently
and on time.
If your employees work on their
computers, use an online task management software to assign tasks to certain
employees. Task management software can help you check on the status of
assignments throughout the week. If you have employees working in the field,
definitely use GPS tracking software to ensure your employees aren’t wasting
time with aimless roving and personal errands. How does GPS work to track remote employees? You
can easily implement it into company vehicles or into software programs.
Track Your Tax Deductions
Budgeting
software is one of the most essential startup management tools. But you
shouldn’t only use it to track to costs and income. You should also use it to
keep track of any transactions that might be tax deductible. In the United
States, the federal government offers tax deductions for startup businesses
that range from market research to office equipment. These deductions can save
your business a ton of money when it’s time to file your taxes. Keep track of
all these expenses from the very moment you start planning your startup
company, and be sure to keep thorough records of each transaction.
Don’t Overspend on “Hip” Stuff
Lots of startup companies want to
be “young and hip” and so they spend a lot of money on happy hours, in-office
kegs, parties, and booze. Sometimes, these are nice incentives to lure good
employees. But this kind of spending can get out of hand fast. It’s better to
put most of your money towards—as stated earlier—marketing and quality-control.
Hire the Best Employees
Strive to hire employees who are
driven and capable of wearing multiple hats—that way, you can fulfill multiple
roles with only a single salary. You can compensate these hard-working
employees via good benefits and promotions as the company grows, and this is
also a good way to grow leaders in your business.
To find the best employees, look further
than the standard online job board. Turn to professional networking sites to find employees with
proven skills that are verified by other professionals and perhaps
by people you know and trust.
If you follow these tips when you
launch your business, you’ll find it easier to invest in your product and in
marketing. Your first profitable month won’t be too far away.
