If you’re setting up a new startup and launching a business for the first time, then you’ll be in that great position where you can feel the excitement of possibility and the thrill of a new idea. Unfortunately though, you’re also going to be in that less-than-great situation where you have absolutely no money and are forced to do everything on the cheap. It will be years before you breakeven, you can’t afford a desk chair, and if the slightest thing goes wrong your company will be a statistic. Gulp!
In such a scenario then you need to learn to be thrifty and you need to work out how to cut every corner possible when it comes to finances. This doesn’t mean going so overboard that you cut quality as well though, so how do you know where to draw the line? Read on and we’ll look at some of the overheads you can cut as a startup… and some of the ones you definitely should not attempt to get rid of…
Things You Can Save On
Believe it or not the office is something you can relatively safely get rid of. Many companies are famous for starting literally in their Mums’ basements, while others make do with spaces like libraries and conference rooms. In an age of cloud computing and video conferencing, you don’t even necessarily need to be in the same room as your colleagues in order to get work done.
I’m not suggesting you stop paying your staff, but if you’re smart there are ways you can get work for less. That might mean outsourcing certain jobs to other countries or to virtual assistants for instance. Alternatively it could mean alternating some work with computers or getting students/interns to come and work for you.
Paper costs a surprising amount in terms of the space it takes up and the cost of buying it and printing on it. Going completely paperless then is a good idea and can save you a lot of money while also helping to make life easier in terms of organisation.
Things You Can’t Afford to Cut Back
While you can cut back on a number of expenses, there are also a number you can’t cut back on without damaging the quality of your business. For instance if you run a commercial business then you can’t cut back on things like disabled access (such as outdoor wheelchair lifts)and you must never cut back on health and safety. Likewise you shouldn’t cut back on things like technology – these are ‘force multipliers’ which can help you to do more work more quickly. If you cut back you’ll end up creating less output and costing yourself money in the end as a result (though you can rent your hardware or buy refurbished second hand items).
Finally, you must never cut anything that would impact on the happiness of your staff. Your employees are your number one asset and you should never forget that!