When you're just starting your business, it can be tempting to spend thousands of dollars on office equipment and supplies, a beautifully designed office space, hiring a stellar team to support you… and countless other things. Even if you've secured investors and have a decent amount of capital to spend, it still needs to be spent wisely if you want to beat the odds and grow out of the startup phase.
Make Use of Free Tools Where Possible
If you've got to invest a lot of money in equipment and special tools to run your business, then using free services becomes even more paramount to help offset the costs. Thankfully, there are a lot of free business tools out there to help you accomplish everything from client relationship management to social media automation, accounting, and more, so you can keep everything streamlined and organized, without paying a hefty price tag.
Start Small and Scale
Rome wasn't built in a day – and you won't go from broke to a millionaire overnight. It takes money to make money, but when you start small to begin generating revenue, you can reinvest it and scale your business accordingly. While costs won't necessarily stay down, they'll stay affordable relative to your revenue as you reach new growth milestones.
Check to Make Sure You're Getting the Best Deal on Broadband
Just because you hear the company advertised all the time doesn't mean they offer the best deal, or they're your only option for broadband. A friend of mine told me to take a look at Broadband Now, and I was surprised to find there were several more providers in my area than I knew about. Because of the service availability and comparison information, I was able to see that while I'm paying a bit more for service, the speed and availability makes it worth it. Switching to another provider means I'd save a few bucks, but what I'd lose in top speeds doesn't necessarily make it worth my time.
Have a Discretionary Budget
Things happen, no matter how well you plan for everything. It's a good idea to have a bit of money set aside that's not allocated to anything in particular -- kind of like an emergency fund for your business. It doesn't mean you can say, "Ooh I worked all night and I need coffee. Let me hit the discretionary funds." No.
It means you can say, "You know, that deposit for $1,000 didn't hit the account like it was supposed to, the power bill is due tomorrow, and I don't have the money." Pay the power bill from that fund, and then when the deposit does hit, replace it. That also leaves flex room in your budget for the times when you've let yourself run out of pens.
Hire Creatively
If there's one place you don't want to skimp, that's on hiring good talent. But, you don't want to hire a person to help you full-time before you're ready to give them enough work, and bringing in enough income to pay them. So, if you find yourself needing help, but unable to justify adding an employee to the payroll, turn to freelancing. The gig economy, as of 2015, employed 34% of U.S. workers, or 54 million. No matter what you need, there's a large talent pool to hire from.
If you'd rather not go the freelance route, there's always the option to hire internets. You get people who are eager to do a good job, and you get to give them the experience they need to get started in their own careers.
Pound the Pavement Yourself
Okay, so you suck at sales, and you'd rather hire someone for that. Sure, you could hire a salesperson and pay them on commission, but that's valuable income you could be putting back into the business. Therein lies the problem. If you're just starting out, you'll have to push outside that comfort zone and do it yourself.
Practice
Read up on sales techniques and pitches. Practice with friends and family. Dig deep. Get out there and make connections. Attend free networking luncheons and events in your area. It may take longer to get to where you want to go when you're doing it all yourself, but trying to do too much too fast can spell disaster for your startup.
Skip the Long-Term Commitments
Opt for monthly and short-term service options, rather than paying for something annually, or getting into any long-term contracts. You may find a point where you can't afford to may the payment on a contract, but terminating the contract could cost you even more money.
Yeah, you may be able to save a bit of cash with an annual plan, but paying month to month is the safer bet until you've built a bit of a cushion and can do some revenue forecasting.
Work from a Co-Working Space (or from Home)
Unless your business absolutely requires some kind of space, save money by working from a co-working space, a local coffee shop, or even your house. The money you'd spend on rent can go to other areas of your business, and when you reach the point where you outgrow that space, you'll be better equipped to handle the expense of an office space.
Harness the Power of the Barter
What do you have that you can trade with others? I have traded websites and content for other services I need – both inside and outside of my business. Once, I wrote blog content for a friend in exchange for him fixing my computer. Another time, I built a website for a friend who was starting her food business, so she gave me free food, and I didn't have to make dinner for a week.
Bartering doesn't pay the bills, but it still gets stuff done, and helps save money for things you absolutely have to pay for.
Count in Something Other than Dollars
It seems a little strange, but addressing costs in something other than the standard dollar may help put things in perspective for you. Choose something you love to buy yourself or something you buy often. Whether it's cases of beer, large pizzas, or something else entirely, when you think: "Hey, this service costs 100 pizzas!" you can catch yourself to reign in the spending when you may have otherwise thought to justify it.
Making sure you've got the money to run your business is no doubt one of the most stressful parts of owning a business. Being realistic about how much money you need to operate versus how much money it would be nice to have is critical. Yes, you may not have the best printer on the market right now, and that could make things a pain for a little while, but you know what you can get by with…and that's what matters.