Saving money in the first months of your new business seems like an impossible task. This is why small businesses, at times, struggle to strengthen (or even maintain) their position. The problem is that you need money for your business to keep making more money. This process causes a lot of stress for anyone involved.
When you start a business you can’t afford to waste any of the money. You will need equipment, office space for you and your team, and adequate computer software. You also have to pay your employees and your suppliers. All this makes saving money and keeping your business profitable look like two impossible tasks. But, there are several smart ideas on how to do that.
You Could Buy Used Equipment
Almost every new business will need to immediately invest in equipment. Equipment costs for startups can range anywhere from $10,000 to $125,000 depending on the type and the size of the business. Used equipment often costs just a fraction of the price of new. Search for this equipment online or visit business auctions, see if there are any going-out-of-business sales, overstock, and repossessed business equipment.
Make sure you get equipment that can deliver high-quality products because that matters the most if you want to keep your customers and clients. You don’t want to act quickly and buy equipment in bad condition.
Use Open Source Software
Today, nearly 80% of businesses are running some part of their operations on open-source software. Why do they do that? Well, because they saved millions of dollars by using open source. The open-source community is made up of amateur and professional computer coders who work on a computer code that is available for everybody. This software is usually free or much less expensive than some similar commercial software. You can find almost any kind of open-source software on the internet (photo editing, writing, coding, accounting, bookkeeping, sale, etc.).
Don’t Rent an Office if You can Work From Home
Technology allows you to work from home alone or with your team via the internet. You don’t have to be tethered to one location if your business allows you that.
Just start your business from the coziness of your home and use technology to connect with your team, target audience, customers, or partners.
Find Discounts
When searching for a supplier you should ask them if they offer discounts for bulk buys. They will usually make a compromise and negotiate terms with their customers. And if they do want to negotiate and come to terms with your expectations that you are good to go!
There is a huge number of companies that would negotiate their prices and offer their services using a discount pricing strategy. That is good for them because lower prices make you do business with them in the long run and it is good for you because you don’t want to waste any money. You should start saving money even before you start that new business. Find the cheapest, closest office space (so you won’t have to commute), and make sure you ask for a discount while you are negotiating with a removal company.
In short, every single time when you start thinking about buying something for your business or hiring a company, ask for discounts!
Outsource as much as You Can
Outsourcing has become an easy and effective technique to save money as a startup. For example, the developed countries prefer outsourcing as much of their business processes as they can to the developing countries like India. They usually do this because of the lower costs. This is the primary reason. It allows a business to skip costs such as health insurance and vacation pay.
A company can save about 60% of operational costs with an outsourced individual.
Choose Your Suppliers
If your business is going to sell products to make money then you are going to need good suppliers. You should search for a good supplier by comparing the products and prices of the suppliers you find. Just choose the supplier that falls in line with your budget and expectations.
Make a Strict Budget and Stay Your Ground!
It’s sometimes very difficult to stick to a budget when every single department thinks that their expenses are more important than everyone else’s. Don’t listen to them in this situation. Don’t spend more money than you have to. Try to stick to a strict budget so you know where every single penny went. This will probably make some of your employees unhappy but you have to save money in the long run. As your business grows and you start making more money you can start thinking about giving more money to certain departments for expenses that were non-planned expenditures.
Go Green
The more energy-efficient office space you have, the lower utility costs you are going to have. This is very simple. Go out and buy LED bulbs. They use three-quarters less energy than your standard lights. This goes for whatever office space you are using. You might also want to think about buying and installing solar panels.
“Going green” will reduce your energy bill and carbon emissions, protect you from price fluctuations because it doesn’t depend on the price of fossil fuels, give you the ability to sell energy to the grid and make you some extra money on the side, and improve investor confidence and reputation among customers. All that in one single blow.