Money, money, money. This is one of the biggest concerns during a startups first year.
As money continues to go out, while not as much comes in, you will want to manage the why and how of every dollar’s use. Here in this post, I am providing several ideas on how to save money during your first year. Several of these ideas were not mine originally, so I encourage you to pass them to friends and fellow entrepreneurs. I am confident you will because that is what entrepreneurs do: they share, network, work, share, network, work, etc.
When beginning operations, buying new stuff and equipment is a very, very bad idea. Buying used will not only save you tons of money but will also improve your asset turnover, which is your company’s efficiency with assets. Some examples of buying used include the following:
- Buy older desks, chairs and other office furniture. Craig’s list is a great online source to find used furniture.
- Used computer equipment can be risky, but your savings could also be huge compared to buying new equipment. Because computers depreciate quickly, I would buy equipment with no more than 3-4 years of use.
Outsource accounting, HR and marketing:
Time is another big concern for startups. If you feel overwhelmed and cannot get everything done, outsource accounting, HR and marketing. Don’t make the mistake of going this alone. Not only will your time be more open, but you can also save money. Outsourcing professional business services are very affordable and can be offered as a suite of services.
Hire loyal, workaholic employees:
High employee turnover is very costly and time consuming. Hiring innovative, hardworking people will not only save you money but also grow your business. Find people who:
- Love their work
- Respect you as a boss or supervisor
- Are willing to make sacrifices or go the extra mile.
These types of people are those who will save you money and bring money in by supporting the growing value of your startup.
The costs of doing business heavily depend on location and the options available. Should you require an office space, settle for urban or out of downtown areas. For example, comparing the costs to work in San Francisco or New York to Denver or Detroit reveals a lot of room for savings.
Other options include
- Using Google Docs rather than paying for Microsoft Office for each employee
- Creating a blog instead of having a PR consultant
- Working from home or sharing rent.
Many large, well-known companies began as startups, with some starting out of their own garages. The point is to be frugal and spend money wisely. Reward yourself but be willing to make sacrifices, otherwise the sacrifice might be losing what you started, your company.
Now I turn it over to you. Do you have anything to add? Any additional ideas on saving money? I’d love to hear them in the comments below.