The startup costs in building a new business include borrowings, equipment purchases, employee salary, and advertising costs. Also, the business plan, permits, and licenses have corresponding fees. Expenses easily accumulate if they’re not tracked properly. Whether it’s your first time managing a start up business or not, it’s important to minimise the costs to keep a consistently satisfying income flow.
In this article, you’ll learn the best ways to minimise your start-up business costs. Here they are:
Save On Rent With Shipping Container
Renting offices can be expensive for novice entrepreneurs to shoulder. You can put up a shipping container pop up shop instead of renting an office space. Set it up in a parcel of land you own or in front of your house.
Check the following benefits of using a shipping container for your startup business:
- More flexible space layout
- Customise the looks and functionality of the structure
- Save on high rental fees and maintenance
- Portable and efficient business solution
Invest in High-Quality Second-Hand Equipment And Furniture
Buying high-quality tools and equipment is advisable for uninterrupted business operations. However, brand new ones usually come with high price tags. That’s why if you’re looking into launching your startup business soon, but keen on not spending too much, it’s a wise decision to invest in second-hand items. But, make sure to source items that are still of good quality.
Check the following tips when buying second-hand equipment and furniture:
- Determine if the parts are easy to find and replace.
- Make sure that issues are only minor and are repairable.
- Check the quality of the materials.
- Check if the desired functionality is still satisfactory.
- Ask the availability and proximity of technical support services for particular equipment or power tools you plan to purchase in your area.
Negotiate With Suppliers
An essential skill that every business owner needs to master is negotiation. Make it a point to negotiate the prices with vendors and suppliers to maximize cost reduction.
Apply these tips when negotiating with suppliers:
- Solid Communication: Maintain solid communication with your suppliers. Show them that you’re responsive and attentive to issues to build rapport and trust. By doing so, you’ll be prioritized in your future transactions.
- Figure Out the Actual Costs: Create more room for negotiation by researching on the actual cost. If a supplier knows that you’re aware of the price, you’ll likely get a better deal.
- Learn The Language: Gain suppliers' respect and trust by letting them know that you truly understand them. Be open to learning how their industry works and use this knowledge to your advantage.
- Aim To Attain Mutual Gain: Remember that you and your suppliers are two businesses trying to make money. It only makes sense to take a course of action that would benefit both companies. If both parties benefit, then better rates, warranties, and services come in.
Use Free Productivity Tools
Reducing monthly expenses is possible by using free productivity tools. For communication, online platforms are now part of the new normal or after-crisis setting. You can use Skype or Zoom for calling employees, suppliers, and investors instead of the phone. Free email services are available, too, such as Yahoo, Outlook, and Gmail. These modes of communication are considered professional nowadays.
For project management, you can use Google apps, like Google Docs and Google Sheets, to store relevant information, such as accounting and bookkeeping data. Everything is stored in the cloud, so you don’t have to worry about using an external drive or other storage solutions.
Here are the other types of online productivity tools you can use that are helpful in startup businesses:
- Employee Tracking Tools: Work-from-home employees can use Hubstaff to track hours.
- Project Management Tools: Asana, Slack, and Evernote are just some examples of project management tools that can help your team accomplish tasks daily.
- Sales And Marketing Tools: Use social media to promote your new business without spending that much. Create your business page and ask your friends and family to follow, subscribe, like, and share it on Facebook. You can even make more money online by offering your products and services on different online platforms, such as listing them on eBay or Craigslist.
While full-time employees tend to be experts in their craft, they usually have higher salaries than fresh graduates. One of the cost-effective ways to start a small business is hiring interns. Offer internship training to new graduate students who are looking for experience. In this way, you’ll get the work done without spending that much.
Here are some tips when hiring interns for your startup business:
- Assess the level of adaptability by giving an outright task test before hiring.
- Find out if the new graduate had part-time job experience.
- Assess communication and problem-solving skills by asking open-ended and critical situation questions.
Try Deferred Payment Systems
A deferred payment option pertains to a right to operationally defer payment from the vendors of goods and services until a later date. For instance, you can request for deferred payment after 30 days of delivery. It will prevent the amount from accruing interest.
Check Availability Of Trials
Some businesses offer products and services with a free trial to increase the customer base. Grab these opportunities to reduce startup costs. Beware of automatic payments and renewals for free trials wherein you’ll be automatically billed once the free trial date is over.
One of the most significant advantages of a free trial is the chance to use a product or service to check if it is suitable for your business or not without paying anything. You can maximise the use of a product or service until its end trial period, such as six months of free trial.
You’ve just learned the different ways to minimise the costs of your start up business. Save money by using a shopping container shop or office instead of renting an office space or building. It would also help to negotiate with your suppliers to get the lowest price for your raw materials and supplies, and consider second-hand furniture and equipment. Other cost-effective solutions include using free productivity tools, taking advantage of a free trial, and looking for deferred payment systems.