Some folks assume that starting a new business means they have to invest thousands in their new enterprise. Let’s face it; thanks to today’s tough economic climate, many people seldom have big money to put into new businesses.
Are you thinking of quitting your day job and working for yourself? If so, congratulations! Today I will share with you some tips to help you spend as little as possible on your new business. That way, you won’t have to panic about running out of cash during your company’s early stages! Here is what you need to know:
Make sure you have enough money to live
Before you quit your day job, it’s important you save up a stash of money to pay your personal bills each month. Some people are lucky and make lots of cash as soon as they start their business. Of course, that’s an exception rather than a frequent occurrence!
When you start a new enterprise, it takes time to build up your brand reputation and market your wares to your target audience. That’s why it’s important you have enough money to put food on the table, as it were.
I recommend saving cash to pay for at least six months worth of bills. That way, you have enough time to work on a “plan B” if things go sour!
Lease instead of buy where possible
One thing that kills many new startup businesses is when they spend their cash buying everything! Doing so leaves them with no cash flow, and ultimately no way to survive. Instead, it makes better financial sense to lease what you need instead of buying things.
For example, let’s say that you are setting up a company that manufactures stuff. You will need to have some machines to automate part or all of the process. After all; machines are cheaper than people, right?
Industrial machines can cost tens of thousands to buy. Instead, the smart thing to do is lease them from the firm that makes them. If it’s not possible to do this, you can always obtain some manufacturing equipment finance to help you out.
It’s like taking out a business loan, except that it’s used solely to pay for the gear that you need to make things with.
Don’t get an office until you’re ready
Another expense that many startups waste their money on is office space. You usually have to take out long leases on offices, and there are hidden fees that you need to pay as well. As you can imagine, working from home is a cheaper prospect!
I recommend doing that until your business is at a stage where it can sustain itself enough to fund an office lease. Now, you might be wondering what you should do if you need to meet with clients?
It’s possible to hire meeting rooms in attractive serviced offices. Companies like Regus offer this service. You can even hire office space for a few days; useful for when you’ve got to do collaborative work with your customers.
Now you know the secrets to saving cash for your startup business, it’s time to get busy. Good luck!