One of the reasons why startups fail is because of lack of financing. It can also come from not being able to handle the cash flow and expenses properly.
Before even beginning your startup, you wouldn’t want to drive capitalists and venture fund companies like Clean Venture Fund away because of your expected costs and expenses. There are ways you can cut costs and spend less, utilizing what you saved for other opportunities and important expenses or investments.
Read on for helpful tips on how to cut costs in your startup.
- Keep track of your expenses
From the moment you launch your startup, you have to track all of your expenses. From the equipment to furnishings, supplies to marketing, the employee benefits to the legal aspects, all expenses will need to be taken note of.
Audit your expenses, checking if there is anything on your list that your business can go without. Keep and check all receipts of expenses related to your business, which can help with organizing and calculating any deductions come tax season.
- Automate and outsource certain business processes
Do you have tasks that are time-consuming and only require minimal skills? You might want to outsource those tasks over to a third-party outsourcing provider.
For instance, you can outsource content writing, graphic design, data mining, or software development. This is because some positions when hired in-house can be quite pricey. Besides this, consider automation using automated lead generation tools and the like, which automated time-consuming tasks and saves you money in the long run.
- Assess your office space
One of the most significant startup business costs is office space. Before you sign a long-term lease contract, assess the space and how much you need.
Can your team work remotely as you sort out the cash flow first? This may be a viable option, as collaborating with remote teams is now easier with advanced technology and efficient communication tools.
Also, instead of renting out a space for the long term, you can opt for coworking spaces that offer private offices at a smaller cost. Many of these coworking spaces offer what businesses need to operate, and you get to work alongside other startups and professionals.
- Look into your suppliers
Before investing in one supplier, receive three quotes from different companies. This will help you look into other options without having to waste time dealing with a lot of suppliers.
Give suppliers complete and detailed ‘Request for Proposal’ details about your needs and expectations. Potential suppliers will be able to negotiate and provide better prices. Also, make sure that you check the monthly invoices to ensure the prices haven’t gone up without knowing (yes, some suppliers do this).
Furthermore, it may be best to invest in office items in bulk rather than in small quantities. Take advantage of the wholesale prices and discounts bulk orders offer, which can save you money in the long run.
Wrapping It Up
Infographic created by Clover Network, a merchant services company