Entering the business world can be quite expensive. That is why many startups struggle with finances as soon as they open for business. If this is the case with your startup, it might be a good idea to start thinking about the ways you can cut your expenses. Even though it may not seem like it, there are a plenty of options you can choose from. We have come up with our top 5 picks for cutting a startup’s expenses. Make sure you check them all out.
Don’t Spend Too Much on Marketing
During your early days in the business world, you will not want to spend too much money on marketing. Even though getting your business noticed is important, there is no point in splashing all of your cash on marketing before you start getting some validation for your product. That way you might end up using all of your funds on a waste of a product. Still, there are ways you can promote your business in this period, without actually having to spend too much. You can always use social media to bring your business closer to the customers.
Give Your Employees Equity
When running a business of any size, you are always going to spend a lot of money on your employee’s salaries. Still, while your business is still trying to find its place in the market, you can use equity instead of paying salaries to your employees. This way your employees will get shares of your company which might even motivate them to work even harder. If you get too protective over the shares of your startup, you might end up having piles of them that are not worth anything at all.
Don’t Invest Too Much into Your Initial Product
When starting a new small business, your no. 1 priority should always be getting to market as early as possible. Even Reid Hoffman, the co-founder of LinkedIn says that “If you are not embarrassed by the first version of your product, you’ve launched too late.” Having this in mind, you should never pay a developer too much when trying to come up with your initial product. When starting out with your first product, the most important thing is to make something customers can give you feedback on.
Save as Much Time as You Can
We all know the adage that the “time is money.” Well, when it comes to running a startup this is definitely true. It is very easy to get preoccupied with some aspects of your business, that you start wasting too much of your time. Also, sometimes spending some money on a piece of equipment that is going to make your life much easier is a great idea. For example, if you or your employees are having hard time reaching the products on the highest shelves in your warehouse, you can always get a scissors lift.
Set a Good Example
Running your own business means your employees are always going to follow your examples. This means that if you start cutting your expenses on some unnecessary things, your employees might do the same. So try to think of the things that you are spending money on but you don’t actually need them. Cut your expenses on these, and your employees are always going to come up with some new ways they can be more creative with a small budget. Not to mention that this will bring a lot of innovation into your startup which is always a good thing.
Make sure you give all of these 5 ways a go and you will be guaranteed to save some extra money for your startup. But there is no reason to stop there. Always try to come up with some new ways you can cut the expenses of your small business.