Why spend more than you need to getting your business off the ground? Conserving cash during your business’s fledgling stages is always a wise idea. Here are six ways to cut your startup costs.
- Run your business from home. Unless you’re launching a retail store, restaurant or other business that requires a physical location, starting your business at home is a great way to save on office rent, utilities and commuting costs. If you need to meet with customers or clients on occasion, you can either meet at their location, at a restaurant over lunch, or at a shared office facility, such as a Regus business center or a co-working space.
- Make do with used furnishings. While you shouldn't skimp on essential equipment such as computers or machinery, you can pinch pennies when it comes to furnishings like office chairs, desks and conference tables. If you're working at home, just pull together odds and ends you already own. If you're setting up an office, save big by purchasing used furnishings. Look for going-out-of-business sales, consignment furniture stores or ads on Craigslist or eBay.
- Focus on digital advertising. Marketing is an essential investment for a startup business, but traditional marketing methods — brochures, print ads, radio, and television — can quickly get expensive. Fortunately, today most customers go online when they're looking for companies to do business, and marketing your business online is a lot cheaper than traditional methods. Concentrate your marketing budget on digital efforts such as pay-per-click (PPC) ads or ads on social media. Be sure to create a website for your business and optimize it for search; all of your other marketing efforts should drive customers back to your website.
- Outsource to freelancers or independent contractors instead of hiring employees. Do as much as you can yourself before you spend money hiring permanent, full-time employees. For example, can you get friends or family members to help out with your startup — at least in the very early stages? When you do need outside help, use websites such as Upwork or Freelancer.com to find qualified contractors or freelancers. Hiring workers on an as-needed basis will cut costs since you won’t have to pay payroll taxes or provide benefits.
- Don't buy what you can lease. You can lease just about everything you need for your startup—from computers and printers to manufacturing equipment and business vehicles. Leasing is generally a smart move for a startup on a budget because it requires less initial outlay of cash. Plus, when you lease equipment, you can upgrade regularly, so you'll always have the most up-to-date tools available to you.
- Enlist experts who can help you for free. There are several great sources of free advice for startup small business owners. For instance, SCORE is a nonprofit organization that provides free consulting online and in person through a network of nationwide offices. SCORE mentors are experienced business owners and professionals, so they have inside insights into how to make your small business succeed. You can also check out services available at your local colleges, universities and trade schools. Small Business Development Centers (SBDCs), typically located on college campuses, offer workshops, advice and more from local business experts.
(Disclosure: SCORE is a client of my company.)