When starting a new business funds are often low and cutting costs is something all new businesses and startups should do to keep them afloat. In this article, we will look at some of the best ways a new business can keep its costs down.
1. Generate clients by outreach
When starting it may be tempting to run big ad campaigns and use up your marketing budget to get clients fast but you could lose all your money and not have one thing to show for it. A new company may not have its offer right and using ads to send potential customers to an offer that may not interest them is going to be a huge waste of money for you.
To keep your marketing budget until you have your offer fixed, your branding on point and your sales team ready to follow up you should consider cheaper methods of gaining customers.
Cold outreach either through email, social media or on the phone may make some people shudder but they are all methods that work for businesses and you can use them too. Using a cold method of outreach you could even get your first customer by the end of the week if you were willing to contact enough people.
Cold outreach gets a bad reputation because of spammers but it can work well if you contact people who would be interested in your services via a personal message.
2. Consider storage
If you own any type of business that has stock or products you should consider renting a storage unit because it’s much cheaper than renting an entire warehouse.
Another advantage of storage for your business is that as your business grows you can rent more units, this way you aren’t starting with more space than you need which means you aren’t wasting any of your budget.
Some small businesses may choose to use their home for storage of their products but this can lead to your home being taken over by your business, which leads to products being lost and damaged. If you do use your home as storage for your business products you should check to see if your home insurance covers these items as some insurance companies don’t offer this protection.
3. Cut down on office space
It may seem tempting to get the biggest office that money can afford but as a startup business things can change quickly and having to find the money for a huge office is going to put pressure on the founders which I’m sure they would prefer to be without.
Instead of getting the biggest office money can buy, think of the size you need and get that office, you may also decide that you don’t need an office at all and you could use a coworking space.
A coworking space still gives you the social aspect of an office and still looks professional for potential customers, it just costs a fraction of a full office.
The ultimate cost-cutting tip when it comes to office space would be to work from home, although it saves you money it does have disadvantages as some companies may think your business is too small to work with them. It all depends on the clients that you want to work with if your clients don’t mind dealing with a company that has staff working from home then go for it.
4. Only hire staff when you need to
It may help your business to employ multiple members of staff for different jobs when you are starting out but once again this puts pressure on everyone involved in the business.
Forbes magazine recommends only hiring full-time staff when you absolutely have to. Instead of hiring full-time staff, you could consider working with a freelancer. A freelancer is only paid when you need work done and isn’t paid a salary.
Freelancers can be hired on websites such as Upwork but before hiring a freelancer make sure to check out their feedback along with past work so you can see if they do the work to the standard in which you like.
Starting a business is hard and sometimes money is going to be tight. If you can cut your costs early on you can get in the habit of being a lean entrepreneur and in doing so will have more money left if the business hits a rough patch. Through these rough patches being frugal can be the difference of staying in business and going bust.