When you are just starting out in business there will be plenty of things that you could be spending your money on. But when you’re starting out, and things aren’t completely established, it can mean that your budget is tight until things are up and running and you are experiencing a better cash flow. In those early days, cutting some costs and sticking to the budget can be really important, to make sure that you start out on the right foot and start without being too much in the red.
So with that in mind, here are some of the ways that you can cut costs when starting out, as they can always be things that you spend more on later down the line. Is there anything else that you would add to the list? It would be great to hear what you think.
Work From Home
In the early days, starting out working from home can be a great way to save. If you have to go straight to hiring an office space than the rental costs of that can be quite large. But the costs of working from home are going to be no more than your normal rent or mortgage payments, and a certain percentage of the costs of running the home (like internet and energy bills) can be classed as a business expense or be tax deductible. So there can be some benefits. You may still want it to look professional to others, though, especially as you are starting out. But even something like a business mail forwarding system is going to be cheaper than hiring an office, especially when you don’t necessarily need to right now.
Avoid Hiring People
As the business grows, this isn’t something that is going to last forever. But hiring permanent employees can be costly to the business. When you’re starting out, it can be a better consideration to look at using freelancers instead of employees for now, simply as you only pay a freelancer for the specific task that you need them to do. You don’t need to cover benefits and sick pay or things like that with freelancers.
If you are signed up to a few different things that are rolling, like your web host provider or a cash point system, then it is a good idea to keep a close eye on them to check that it is all OK. If any of them renew automatically, then the cost could have gone up and it will be something that you need to check. So with that in mind, it is a good idea to monitor what you are using and the associated renewal costs. If you need to avoid auto-renewing, then you need to know the dates that you are looking at.
Use Your Connections
When it comes to business, anyone and everyone can become a connection. So think about who you know and what help you may be able to ask them for. Perhaps you have a friend that could design a website, or a lawyer friend that could answer some questions for you. When you can use your connections cheaply (or for free), it can help your budget massively.