It’s important for all businesses to minimize costs wherever possible, so that maximum profitability can be achieved. When you’re launching a new startup, however, you’re likely to have limited resources and capital. Due to this, it’s even more essential to keep your expenditure low. With this in mind, take a look at these five ways to cut startup costs now:
1. Don’t Hire Staff
You might need a reliable, professional workforce, but this doesn’t necessarily mean you need to hire employees when you launch your business. By working with freelancers and subcontractors, you can access the skills you need without the costs and resources associated with recruiting permanent staff. In addition to this, the gig economy maximizes flexibility, which is beneficial for small businesses when the need for human resources might fluctuate.
2. Look for Low-Cost Premises
For some businesses, such as a retail store or restaurant, it might be important to be situated in a prime location. If your startup doesn’t rely on footfall, however, you can significantly reduce your operating costs by securing low-cost premises. This might mean running your startup from home or renting a shared workspace. The expenditure associated with company premises is often a business’s highest cost, so don’t fall into the trap of paying more than you need to.
3. Find Managed Service Providers
As well as building a dynamic workforce using freelancers, you can rely on B2B service companies to provide the professional support you need to get your startup off the ground. When you access managed IT services from Data Cube Systems, for example, you can ensure that your IT infrastructure primes your business for success and provides the advanced security you need. Furthermore, you’ll be able to access instant support whenever you need it, while managing your budget and benefiting from fixed monthly fees.
4. Obtain Low Interest Rates
If you’re applying for business loans to fund your startup, don’t be tempted to agree to excessively high interest rates or unfavorable terms. Although you might be eager to get your startup underway, high interest rates can inflate your overheads for months or years to come. Look around to find the best deals or consider other types of funding, like working with venture capitalists or using P2P lenders.
5. Find an Accountant
Many new business owners assume they can save money by doing their own accounts, but this isn’t always the case. While you might avoid paying accountancy fees, you could end up spending much more in the long run. An experienced accountant will be able to provide bespoke advice that enables you to reduce your tax liability and maximize profits. As a result, you can save a significant amount in the long-term by finding the right accountant to work with.
6. Achieving Startup Success
It’s a competitive marketplace for new startups, but cutting your costs and streamlining your operations can help to increase your chances of being successful. With detailed financial planning, you can run your business on a low budget and expand as your revenue begins to accumulate.