June 4, 2021 | 4-minute read (644 words)
A startup is an exciting prospect for a budding entrepreneur, especially if it is your first one. Not only is it a thrill to be in business for yourself, but also your new decision-making prowess brings an elating sense of freedom.
Amid the adventure however, keeping tabs on costs and cash flow is integral to your business’ survival. Your new business will require incoming funds, but cash crunches will inevitably occur as a new business with startup expenses, Use the following tips to keep the costs you can to a minimum while earmarking funds for the most important tasks at hand.
Keep a check on your expenses
As they say, every penny saved is a penny earned. The more you can save on costs, the more goes straight to your bottom line. Keep a tight rein on expenses. If you are out of your office for an extended period, just turning off the lights, heat or air conditioning can add up over time. Audit yourself to weed out any frivolities that you can do without
Used is good
Buying used goods for work may not be a bad proposition when you are starting out. Many established businesses change their gear every year or two, which works out nicely for a fledgling business that could do with a lightly used computer or office furniture. Vehicles or machinery can be bought the same way if your business warrants it.
Rent it, don’t buy it
Renting or leasing is often a good option. Renting equipment will always save you money in the long run, and if you have a credit line or loan will also save a few bucks on interest. What’s essential is to save your capital for the tasks that will help your business grow.
Do smart hiring
Manage your hiring wisely, meaning consider whether you actually must hire at all. Hiring employees from the get-go puts you in a position of liability. Instead, think about how you can get valuable work done without the commitment of an on-staff employee. Outsourcing and contract employees could be a better bet, especially if they will be performing time-consuming tasks that result in no monetary gain.
Secure a line of credit while managing cash flow
Many new business owners do not consider that they must have a ready line of credit for access to short-term funding. It is even more important to have your cash flow in order. Many business owners make the mistake of not paying bills on time, then find themselves paying unnecessary interest. Aim to make sure you clients are up to date on their payments and that you know where your next source of cash will come from so you are able to pay your bills in a timely manner.
It is a good idea to sell yourself to new businesses with an aim at creating pacts, bartering, trading references and networking. Not only will you get new clients and geographies, but you will also gain insight on how to conduct partnerships while potentially getting a good deal that is mutually beneficial.
Time is money
The truth behind the adage “time is money” cannot be overstated. If something is not affecting you, your business or your spreadsheet, let it go. Don’t run after work and run errands that you can outsource. Your goal should be to run, act lean and be fast. Shed the excess baggage. Outsourcing, freelancers and recruiting should be used as weapons in your armory. Remember, money can be earned back. Lost time can’t be.
Takeaway: The early stages of a new business are full of tumult and endless decisions. The key is to make decisions that are beneficial in the long run. Spend where necessary, and trim where required. If it is not taking you forward, it is better to lose it.