Running a small business lets you follow your dream, be your own boss and see your ideas grow from the ground up. Although they are often called the “backbone of modern economy”, small businesses don’t come cheap. As the company grows, it needs increasing amounts of money to make ends meet, but without enough money to advertise or deliver a quality product or service, it loses its clients to the competition. Check out these six strategies to keep your startup afloat.
It’s beyond important to keep track of expenses from the very beginning. A prudent CEO tracks every single expense from the purchase of equipment, furnishings and supplies through advertising and marketing expenses to consulting and legal services. Keeping records allows you to identify unnecessary expenses and eliminate them. On the other hand, expense records also act as evidence in case of legal troubles, and if your every receipt is recorded in a safe location, your tax deductions will be easy to calculate anytime.
Secondly, create a list of all the items your business needs to start and operate effectively, including computer equipment, POS systems, business software, furniture, office supplies and supporting facilities. Once you come up with a budget that accounts for all the necessary items, as well as loans and grants you’ve received, it will serve as an indicator of the expenses needed for setting up the business. Certainly, some expenses will need to be depreciated, so make sure you delay making purchases that aren’t urgent.
Although a pay-per-click campaign might seem a simple and straightforward solution for advertising your company, you’ll soon find that in order to keep the traffic alive, you’ll have to keep pouring money into AdWords campaigns. However, if you want to build lasting traffic without constant expenses, focus on building a blog for your website. An engaging and informative blog will allow potential customers to read more about your products and services, as well as the people behind the company. By updating at least two times a week you’ll strike the right balance between advertising and targeted content.
Even a small office with up to 4 employees can easily spend more than $1,500 per employee a year on office supplies. For a startup struggling to maintain a competitive edge, that could be the difference between life and death. Make sure you get absolute lowest per-unit costs by buying expendable items such as pens, printer paper and cartridges in bulk. Internet stores don’t have the huge overhead of renting a building space and paying an army of employees, so they’re always able to give the best prices. For instance, Winc Australia not only offers plenty of weekly deals, but also 30-day business accounts.
Among all the consultant specialists your company will need, the lawyer is the most expensive one. Since you want to legally protect your business, you want to make sure the company formation documents are in order. While ownership details and incorporation documents vary between the United States, the UK and Australia, going with companies such as Quality Formations or Legal Zoom will get you incorporated online for a fraction of the cost of hiring an attorney. Once informed on the paperwork you need to get in order, incorporating your business online can save you big time in legal expenses.
The question arises how to include outside partners without increasing your costs significantly. One of the ways is to use equity to minimize salary expenses. If your partners are able to sustain themselves off their personal savings for a few months or have another source of income, offer them a simple equity deal. Outside consultants might be willing to accept a small equity takes instead of straight payments for their services. Keep in mind though, that with this option, you’re stuck with this person for a long time.
The nature of every business varies, with some allowing for more cost saving in certain areas than others. While these six tips are pretty much universal, it’s up to the business owners to decide which expenses are more and less important.