This concise guide looks at the different areas of startup costs, with strategies and tactics to reduce expenses in each area.
Cash flow management is one of the major challenges for start up businesses. It’s easy to underestimate just how much money it takes to survive the first couple of years. You’re still building up the company, and there’s a lot of ongoing expenses to worry about.
How to reduce startup costs and expenses
The key to success as a start-up business is to keep your expenses as low as possible while you grow. So, how can you keep your startup costs expenses down? Here, you’ll discover some of the best ways to lower expenses in order to protect the business.
Assess the startup costs of supply
One of the major expenses of any business is paying its suppliers. So, it makes sense that this should be the first place you look to bring down your startup costs. It’s easy thanks to technology, to compare different suppliers. So, look at what you’re paying now and see if there are any cheaper suppliers you could potentially switch to.
Loyalty doesn’t get you very far in business today. So, if a supplier isn’t delivering the best value for money, don’t be afraid to make the switch.
Another issue you might be facing is that you don’t have the money you need to pay your suppliers, in which case you should consider purchase order financing. This type of financing will allow you to grow your customer base without stressing about being able to fulfill orders.
Protect yourself with insurance
While extra insurance may feel like you’re adding to your startup costs, it can save you money in the long term. If you provide company cars for example, you may want to consider taking out gap insurance.
This would cover the gap between what you paid for the car and what it is valued at if an accident occurs. This type of insurance is especially important for luxury brand vehicles like Mercedes. So, start looking for an affordable Mercedes warranty that includes gap insurance.
Use the right marketing techniques
Marketing is important for all business. However, with so many different techniques available, it’s easy to end up wasting a lot of startup costs on methods that just aren’t working.
Monitor what you’re spending on marketing and whether it’s actually working. Don’t forget to utilise free marketing techniques too. Social media is a great place for start-ups to begin marketing themselves. You can create a free business page to help build up brand awareness and link back to your website on posts you create.
Avoid overspending on your company credit card
If you’ve got a company credit card, it’s tempting to charge all of your business expenses onto it. The trouble with this is, you aren’t always keeping an eye on what you’re spending. So, you could soon find yourself paying back a lot of monthly debt repayments. Keep your credit card spending as low as possible to ensure your monthly expenses don’t get too high.
There are lots of ways start-ups can save money on startup costs and expenses, and the above are just some of them. The more money you can save, the more profits you’ll start to make and the more successful you’ll become.
