5 Ways Your Startup Can Save Money in the First Few Months
Starting a business from scratch is expensive – don’t let anyone fool you into thinking otherwise. However, there are some different ways you can save money if you’re willing to scrutinize expenses and make strategic choices.
5 Ways You Can Save Money
You’ve probably heard the statistic that says 9 out of 10 startups eventually fail. And while failures are tied to a number of different factors, the second most common issue involves money. According to one study, 29 percent of all failed startups report running out of cash prior to going under.
Sometimes running out of money is inevitable, but other times it can be prevented. By being smart with the capital you have and conscious of what you’re buying, you can save money and give your startup a better chance of surviving. Let’s look at a few specific ways you can save in the early days.
- Purchase Used Equipment
Who says you have to purchase everything brand new when launching a company? You don’t need the latest, greatest version of something in order to get started. If you try to buy everything new, you’ll eventually find yourself in the red. A better strategy is to purchase used equipment – especially when it comes to expensive assets like IT hardware. Just make sure you’re buying used equipment from a credible company – like BrightStar Systems, which offers in-house warranties and guarantees.
- Try Free Software
Anytime you run across a piece of software you like – such as a CRM platform, accounting tool, or marketing application – see if they have a free version. While free versions are typically limited in what they can do, you might be able to get away with using them for a while. Your small size and limited needs make your business a perfect candidate. This also gives you a chance to see how you like the software before fully investing.
- Work Virtually
Office space and real estate are usually the most expensive investments a startup makes – but what if you can put this off for the time being? If you’re willing and able to work remotely and establish a virtual office, you could potentially save thousands of dollars per month. A tool like Sococo – which brings systematic organization to virtual workplaces – can make this task easier.
- Hire Contractors
You don’t need to hire full-time employees until you get your business established and scalable. For the time being, you can do perfectly fine with contractors – especially if you’re working out of a virtual office where people are spread out all across the country. With contractors, you don’t have to worry about paying their taxes or supplying some of the other things that are mandated by law.
- Barter for Services
You might not have the financial resources to purchase a certain service or product, but have you considered bartering with other companies using some of the assets you possess as leverage? This is actually a pretty common strategy. In the early days, many companies trade and barter with one another in an effort to get what they need without totally draining their resources. In fact, the International Reciprocal Trade Association (IRTA) helps facilitate this.
Save Where You Can
You don’t want to prevent your business from purchasing and investing in the things it needs to grow and be successful, but you also can’t afford to be lavish or careless with your spending. As you continue to grow, make sure you’re being a smart steward of the financial resources you have at your disposal. Good choices now will lead to a bright future.