8 ways startsups can trim their business expense from day one.
When starting out a new business, it’s likely that you are going to incur a number of costs you might not have anticipated. Hidden fees for things you didn’t know you need continue to pop up, and if you don’t go in with a plan, you could find yourself up to your ears in debt in no time at all. But, depending on your business, there are ways you can cut costs in the early days of your venture to save you money in the long run, and get you started on the right foot.
- Utilise a “hub” space
Plenty of major cities are starting to go along with the idea of communal workspaces, and by working from a hub, you can meet other likeminded people to collaborate with. Working alongside people who are in different fields can also give you ideas you might not have otherwise considered, and can keep you stimulated and willing to try new things. It’s also a great way to save money on office space in the early days when you don’t need a full office for your business. In Melbourne, places like Hive and Inspire9 are a great place to start.
- Find freelancers
If you’re after something like a graphic or a small amount of website content, it isn’t worth your budget to hire a full time employee to cover these areas. Look to freelancers, who will often work for a fraction of the cost, to figure out things like logos or work on website design. This is where that hub environment could come in handy, as you will be in contact with all manner of creatives. Otherwise, websites like freelancer.com.au can help you find people to do the work without hefty recruitment fees.
- Consider a joint venture
If you have a business idea that needs a physical space, look into working alongside a non-competitor to save on space. It’s becoming more and more popular for coffee shops to spring up inside retail spaces these days (think Gloria Jeans inside Dymocks on Collins Street in Melbourne), and it’s becoming popular because it’s a great idea. Each business can capitalise on the others clientele, and both can save a bundle on retail space. For B2B businesses, sharing an office space will work because in the early days, you won’t need a huge number of staff, so small spaces can be shared easily.
- Or forgo a physical space entirely
But if you don’t need a physical space, consider skipping out on that expense. Hosting a website is far cheaper, and as businesses start going digital, the online space is growing for retailers. Businesses like SkinnyMe Tea have never existed in a physical sense, starting online and without a “real” shopfront, but their success has led to huge profits and a massive online following.
- Run tests to figure out demand
If you do need a physical retail space, it’s worth testing demand in the online space first. Otherwise, you could start up shop without knowing what the actual climate for your product is going to be like, and you could lose a lot of money. That way, you can determine the amount of room you’ll actually need before you go ahead and start leasing out a space.
- And use experience to dictate what you actually need
Once you’ve got the testing figured out, you can also use that to determine what you actually need by way of stock and staff. Testing the online sphere will let you determine how much stock you will need, and will stop you buying in bulk unnecessarily. It will also make you aware of how many people you need on the books as staff, and how many are just extraneous and costing you money.
- Look at what other campaigns are doing at the moment
If you can, try for piggyback advertising to save on early marketing costs. Coming up with an independent marketing and advertising strategy can by costly, both in money and time, so working alongside a non-competitor’s strategy to market your own product can mean an increase in revenue for the both of you. Look at what is happening in the world around you and see if you can tie your business into local events and trends, just to get your name out there. Brands responding to the ads airing during the Superbowl are a great example of how piggyback advertising has gone digital, too, and developed rapport between companies.
- Work to help other businesses
This tip will work more for specialty businesses, but consider what the equipment you have could do for other people. If you use an industrial level printer in your business but don’t utilise it constantly, consider leasing out its services to local businesses. That way, you can get some of the money back on the expensive, bulkier items you need, and give other small businesses a helping hand.