9 Belt Tightening Ideas for Your Startup
Ask any startup. They’re always running short. Short of people. Short of time. Short on funding. It’s a constant struggle. And most startups fail for that very reason. Not every business has the fortitude to stand up to daily challenges. When you have a ton of money that can be spent to fix every problem that comes along, life is brilliant. However, that’s usually not the story of the average startup on the block.
Many are self-funded. Some are funded with loans from friends, family or the neighborhood bank. Some are crowdfunded. Whichever the case maybe, it’s never a bad time to have a little extra cash in the kitty for that rainy day. Here are 9 such ideas to get your business going on “economy mode.”
#1. Prioritize Your Expenses
This is step 1. Simply too many new businesses spend on frivolous things as they start out. Without even earning a single penny, large sums are invested in things that don’t offer any real returns.
Before you spend your cash on anything, and I literally mean anything. Think about whether you really, truly need it. Check if the business can do without it. Spend only if the expense is unavoidable or necessary for the business’s survival. Everything else can wait.
#2. Use Free Software Instead of Paid
Instead of spending precious resources on paid software, hunt around for free versions. There are plenty of them around for a business owner who’s willing to go that extra mile.
Don’t waste money on installing Microsoft Word or Excel in all your office computers. Switch to Google Docs instead. Google Analytics gives you in-depth (and free!) website analytics data. Use free versions of paid tools for as long as feasible. HootSuite (social media), SurveyMonkey (forms), MailChimp (emails) all offer extremely generous freemium plans that startups must make the most of.
#3. Move to the Cloud Instead of Buying Expensive Infrastructure
Forget about buying and setting up physical servers for your business. With the plethora of cloud server options out there, there’s no meaning in investing money and space in physical infrastructure that will get outmoded in no time. With cloud systems, you have the option of renting only as much infrastructure as you need. Technology upgrades, system maintenance, system security and breakdown repairs are not your headache anymore. As your business grows, your cloud consumption has the flexibility to grow with it.
Instead, consider moving as many functions to the cloud as possible. From servers to cloud storage, from cloud based ERP systems, CRM systems and more, nothing stops you today from getting on top of cloud 9.
#4. Shop Around Before Committing Money on Anything
Take a tip from your Mom. Every time you need to buy something for the business or get a new supplier on board, shop around a bit. Sometimes the most unexpected options surface much after you’ve already committed to a more expensive option. For example, you probably know that your good old WordPress blog can be turned into an ecommerce site in minutes with a simple shopping cart plugin?
What you probably don’t know is that the same functionality is doubtless available for your customized web framework – such as Shopify’s Buy Buttons for Joomla or Drupal (the second and third most used CMS respectively).
With advances in coding and development tools and APIs, ecommerce and web functions aren’t necessarily restricted to the most popular or conventional technologies. It’s no longer necessary to spend hundreds of dollars on developers and web designers. Compare suppliers and read up reviews about shortlisted ones to judge the best combination of cost and quality.
#5. Work from Home / Shared Premises as Long as Feasible
Why waste money on renting office space if your startup consists of just you and maybe a couple of other employees? Save that rent and take over your garage till you only have employees that you can count on one hand.
Once you’ve outgrown your home office, you can always look at shared office spaces in your city. Use services like ShareDesk or DesksNearMe to locate work spaces that meet all your infrastructure needs.
#6. Employ Freelancers and Interns
People are the most important resource that an organization can have, especially a budding new business. The right talent often comes at a high price and if you’re serious about your business succeeding, you’ve got to be ready to pay the price.
However, not all your employees need to know the theory of relativity. For those jobs that don’t need rocket scientists, outsource. Even better get interns, who will work for little to no pay, in return for a dedicated work ethic. Sites like Elance and Internships.com cater to businesses that look after smaller parties and business get-togethers.
#7. Go for Little Things That Result in Huge Savings
As the saying goes, “Little drops of water make the mighty ocean.” Create a savings oriented mindset to try and squeeze in savings wherever possible.
Begin by going green. Contrary to popular opinion, green technology can not only be good for the environment, it’s also cheaper in the long haul. Pick CFL bulbs instead of incandescent bulbs for office lighting. Switch to solar power to get tax breaks from the government. Opt for a Skype call in place of long distance business travel, saving both time and money.
#8. Partner with Other Brands to Maximize Marketing Dollars
Continue your quest for free in a domain that is traditionally viewed as a cost center – marketing. By partnering with brands that are not in direct competition with you, you can target each other’s audiences – getting free marketing reach for no cost at all. Not only will you pick up a thing or two about running your business from established brand partners, you can also ride on their brand equity to get easier acceptance from your partner brands’ followers.
#9. Tap into Customer Referrals for New Business
In the last section we referred to marketing as a cost center. It does not always have to be one. By turning your existing customers into brand ambassadors, you can reach out to new customers from their network. Incentivize your customers to refer their friends and family to your business and make money without a penny spent on advertising.
Do not look down upon cost cutting as something only companies in trouble do. The fact is, companies that maintain low costs rarely get into trouble in the first place. Think about it. If Google can do some belt-tightening, so can you.
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