Start up businesses have a lot of challenges and many never really get going because of cash flow problems. It’s vital for a new business to maximise its profits and avoid wasting money, so that there are sufficient funds to keep the business going as it slowly builds up its client base. This strategy will also help tide you over during the inevitable downturns that afflict any business. Attending to these simple financial issues will help you use your resources wisely and avoid the worries of an empty business bank account …
One of your biggest expenses, other than staffing costs, will be your premises. You may be tempted to sign a lease for a fancy office with an impressive address. Don’t – that hefty lease could be a millstone as your business struggles in its early years. Look at options like co-working or renting a desk in premises designed for start ups. You’ll benefit from company and mutual support, as well as keeping your costs down. Many businesses began life in the founder’s home, so if you have space at home that’s another option.
When you’re all fired up with enthusiasm for your new venture, it’s hard to resist buying the latest computer equipment and fancy printers, or splash out on items that you need to run your business. That can really hurt the cash flow of a new business. It may make more sense to hire equipment or purchase second hand – and you should always think hard about whether a purchase is worthwhile. Also shop around for suppliers. Look for wholesalers and stores that offer discount office supplies – you can save a lot on stationary and equipment. And finally, consider whether you really need to print something out at all – you can save a lot of money by avoiding wasting paper & ink.
Wages are another huge cost, and unless you’ve got considerable backing you’re unlikely to be able to fund many full-time staff (or any). But you still need people to work on your website, write content, and deal with customers. You may be able to combine a lot of roles into one, but rather than expect one person to be a jack-of-all-trades, consider hiring a freelancer for each task. It’s possible to outsource pretty much any administrative task, and why have full-time staff for tasks that don’t need them?
Have you ever noticed how many offices and shops leave lights on all night? That’s a waste of money and energy. Such expenses may be tax-deductible, but you’ve still got to pay the costs up front and wait months to reclaim them. Shop around for deals, just as you would with your home and car insurance, and make sure that your office isn’t wasting energy. Make it a policy to regularly review running costs and how you can save cash without sacrificing quality or customer satisfaction. You might be surprised at how many ways there are to trim your costs.