When you are starting a new business, costs are usually higher than we often expect so looking at ways to maximise every penny is important.
For every penny you spend, you have to know where you are going to make it back and know that you are getting the highest possible value from it. Here are five money saving tips to help get your start-up off on the right track.
Look at your priorities
Every business has its priorities, and they change all the time. However, it’s important to understand that everything has a price attached to it. What you spend your resources on can have an enormous impact on your chances of success. So, it makes sense to target the right areas for spending and the right areas for saving.
But how do you do that? Having a business plan can help you to prioritise what expenses are vital to start off and which expenses can wait. A popular option right now for small businesses and entrepreneurs is crowd funding. If you are successful at it, it will help you to come up with the money to turn a product idea or prototype into full-scale production.
Outsource the right services
All business services will cost you money, but some will save you more than you spend. The perfect example is small business accountants. They save you the headache of having to figure out complex tax laws and help you to maximise the earning potential of your business.
Another growing trend right now is to hire virtual assistants. You can hire them on a part-time basis to take care of administrative tasks for you while you focus your time and energy elsewhere. Your time is money – never forget that.
Is hiring staff the right option for your business?
As businesses start to grow and take off it can be hard to keep up with all the daily activities and demands. Before hiring full-time staff be sure you can afford the added payroll costs.
Employees can be expensive – not only their wages but depending on the country and laws where your business is located there are National Insurance payments, benefits, taxes, etc. Some small businesses fail because they try to expand too quickly and take on too much payroll overhead.
Another vital area for new businesses is inventory control if you sell physical products. It’s a tricky subject to approach. On the one hand, you need enough product to satisfy demand, but on the other, too much stock can potentially cost you a lot in storage fees because of the additional space required and if it does not sell then what?
Some businesses are then forced to liquidate overstock which causes them to lose money in the end. Somewhere, there is a sweet spot that you can achieve, and although it can be hard to find yours, with proper inventory control, it’s possible.
Make more sales
Of course, the best way to save money is to ensure that you are making it. And the only way to do that is to make sales which sounds easy but can be difficult even for established businesses.
When starting out the longer a product takes to develop, the longer you have to wait before you can start selling it, which can cost thousands and thousands of dollars. In some cases – such as software development – companies sometimes choose to release their products before they are fully tweaked and then release patches and fixes afterwards.
Don’t forget, business is never stationary, and it’s always about making progress and choices. It is about making plans and being flexible to change your plans along the way if it becomes necessary.
Chantal Bechervaise is located in Ottawa, Ontario. She is passionate about everything related to the world of work: Leadership, HR, social media and technology. You can read more from Chantal at her TakeItPersonelly blog or follow her on Twitter @CBechervaise.