Three ways to cut start-up costs
You need money to make money; that’s what we are always told. However, starting up a new business is an expensive venture. Here are three specific ways that you can cut costs during this time.
When furnishing your office, merchandising your store or investing in electronic equipment, look at used or rented options. Having the flashiest items isn’t a necessary use of your money, especially when you are just starting out – in fact it’s an impractical use of cash that could be used elsewhere.
Being frugal in the beginning is necessary in creating a successful start-up business as you can then spend that money on other, more important, things later down the track.
Employees and their salaries can cause a distinct increase in outgoing cash, but they don’t have to. If you are smart about who you hire you can cover all the bases with a select few employees who are able to cover the fundamental roles well.
Without having to hire too many employees, but still hiring talented people, you’ll be able to avoid a lot of costs involved with wages and salaries, while still having the ideal productivity output.
Administration – Administrative tasks can be done by almost anyone. If everyone is willing to put in their own effort to maintain their personal administration, you won’t need an administration person.
More than one business development manager (BDM) – When you are just starting out it is unlikely that you will have a huge number of clients, and so the need for multiple relationship managers will be small. Choose a BDM who has experience managing multiple clients and let them work with your initial clients.
An in-house chief financial officer (CFO) – It is uncommon for a CFO to be needed 24/7 and so having one in-house will be an unnecessary salary that you will have to pay. See below for a way to manage your finances virtually.
An in-house CFO can demand a lot of money and may not be the best fit for your business.
Having a virtual CFO means that you have a choice of who manages your finances as well as having someone who is available when you need them. This will cut your expenses as you do not need to pay them a full-time salary and they are flexible with what types of packages they offer, working with different budgets.
Why you should hire a virtual CFO
Cutting costs is crucial for start-ups. Cutting corners with these three tips will help you to stay afloat during your first year in business.