You’ve taken the plunge and are getting to grips with running your own business, but how can you minimise the costs associated with getting things off the ground? One of the biggest concerns to any fledgling business is start-up costs. Here are our top five tips for reducing your start-up costs and save money at this crucial stage of business development:
1. Avoid getting an office until absolutely necessary
If you’re starting a new business, running it from home will save you a significant monthly outgoing on rental space, and you can make a saving come taxation time by accounting for your property as doubling as your office. This may be more difficult if you employ staff immediately or need to have regular face-to-face clients meetings. If it’s primarily an online business then you could make use of a free server service such as Dropbox to share your work with colleagues. If your new business is not based online and you expect walk-in trade from customers, try to negotiate the best deal on rent by going for an extended rental period in order to minimise business start-up costs in this area.
2. Don’t spend too much on a business line
You can present the same level of professionalism running a home business as operating from a commercial property by keeping a distinction between home life and work life, especially in terms of what your customers, suppliers and contacts see and hear. The solution to this is to have a dedicated phone line for your business, but these can be costly and could involve complicated rewiring.
With a Vonage home business plan, you can simply plug a phone into your existing broadband connection and enjoy low-cost internet calls and a host of other features that can enhance your professionalism. You can add new phones and numbers as your business grows, transfer calls to other phones or mobiles, find out who is calling and waiting to ensure you never miss a call and receive voicemails from any phone or as texts and emails.
3. Opt for freelancers rather than full-time staff
When you’re just starting up a business, there is so much to do in terms of establishing the company itself that the actual process of running the business operations can suffer unless you are able to delegate responsibilities to others. However it is a big, expensive step to employ full-time staff. The solution here is to employ freelancers on a per project basis. The business world is awash with freelance talent that for whatever reason hasn’t committed themselves to one employer – so make use of it! Not only will you be saving on employee costs such as national insurance but you can utilise their services as and when you need them, rather than still paying if the work isn’t there – a great tip for minimising your business start-up costs.
4. Establish partnerships to grow your business
When you start to have success with your start-up business, your clients may sometimes ask whether you can provide an additional service to your primary offering. Although you may not be geared up directly to providing this service, it’s a shame to turn it down as it’s a great way of broadening your offering and growing your business. But if you say yes to these additional services how can you be confident that you’ll be able to deliver them to a high standard? The answer is to establish partnerships with similar sized start-up companies that offer sector related services. This can be a two way thing, so they can offer your services too, leading to both companies growing in tandem.
5. Set a monthly budget – and stick to it!
One of the common reasons that a new business fails is due to a lack of funds. A business needs to bring home the bacon for it to exist so you need to keep a tight rein on your business start-up costs to give it the best chance of success. Practical ways of doing this include calculating a monthly budget that your business can operate on, and keeping to it. Try to have at least six months of expenses in the bank so that if business dries up for a period of time you can ‘ride it out’ until it picks up again. One of the biggest financial decisions you’ll have to make is in your choice of accountant. Find someone whom you can trust to properly advise you in business cost reduction. Lastly, have confidence in your own abilities. A lot of people struggle with numbers but with the right help and a sound business mind you can do it.