The biggest hurdle you’ll face when you launch a business is that you’ll have to quickly earn a cash flow before you run out of your initial funds. The less money that you spend from the get-go, the more time you’ll give yourself to secure a profit and keep your business going.
Of course, minimizing your business costs is a lot easier said than done. Follow these tips if you want to reduce your startup’s spending.
It’s convenient to run all of your business’s departments in-house because it makes for better communicativeness and speedier turnarounds. However, that also means that you’ll have more salaries to pay, which is going to drain your funds more quickly. In the early months of your business, it’s best to put as much of your money as possible towards marketing and quality-control.
There are several departments that you can easily outsource to third-party agencies, and you’ll often pay less for these services than if you were to hire in-house employees to perform them. Here are a few departments you can outsource:
- HR: Your startup is bound to have fewer employees, so there’s less likelihood that your employees will have HR conflicts. An outsourced HR company can manage small conflicts and also provide automatic payroll services.
- Marketing: It’s important to have a Marketing Director at your company, but you can outsource marketing jobs like copywriting, graphic design, website building, and social media advertising.
- Tax Preparation: Business taxes are always more complicated than personal taxes, so it’s best to let a tax preparation company file your taxes so you can put more time toward day-to-day management and business development.
It’s the goal of any company to grow large enough to bring these departments back in-house. But when you first launch, you can save a lot of money by just outsourcing them.
Use a Remote Workforce
An office is one of the most expensive costs for a startup business. If your employees mostly do work over the computer, you might consider letting them work remotely. With a remote workforce, you won’t need to spend money on a larger office space—and you might not even have to spend money on an office at all.
Some business owners are nervous about managing remote teams because they’re afraid their employees might not be as productive is left unsupervised. But there are several ways to ensure your employees are getting their tasks done efficiently and on time.
If your employees work on their computers, use an online task management software to assign tasks to certain employees. Task management software can help you check on the status of assignments throughout the week. If you have employees working in the field, definitely use GPS tracking software to ensure your employees aren’t wasting time with aimless roving and personal errands. How does GPS work to track remote employees? You can easily implement it into company vehicles or into software programs.
Track Your Tax Deductions
Budgeting software is one of the most essential startup management tools. But you shouldn’t only use it to track to costs and income. You should also use it to keep track of any transactions that might be tax deductible. In the United States, the federal government offers tax deductions for startup businesses that range from market research to office equipment. These deductions can save your business a ton of money when it’s time to file your taxes. Keep track of all these expenses from the very moment you start planning your startup company, and be sure to keep thorough records of each transaction.
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Don’t Overspend on “Hip” Stuff
Lots of startup companies want to be “young and hip” and so they spend a lot of money on happy hours, in-office kegs, parties, and booze. Sometimes, these are nice incentives to lure good employees. But this kind of spending can get out of hand fast. It’s better to put most of your money towards—as stated earlier—marketing and quality-control.
Hire the Best Employees
Strive to hire employees who are driven and capable of wearing multiple hats—that way, you can fulfill multiple roles with only a single salary. You can compensate these hard-working employees via good benefits and promotions as the company grows, and this is also a good way to grow leaders in your business.
To find the best employees, look further than the standard online job board. Turn to professional networking sites to find employees with proven skills that are verified by other professionals and perhaps by people you know and trust.
If you follow these tips when you launch your business, you’ll find it easier to invest in your product and in marketing. Your first profitable month won’t be too far away.