Starting a new business is a big challenge. Doing it without any losses is even a more serious challenge. Hopefully, the cost-saving tips we provide in this article will help novice business owners to make the right decisions and save their money. The article is mainly focused to start a small business without losses.
Create a Solid Business Plan
Before you start, you must clearly see the big picture. So, creating a solid business plan is the first goal of any new entrepreneur. Your business plan must be as detailed as possible. Typically, business plans include the following items: description of your products or services, equipment, description of the target audience, location, price of products or services, sketches of operational and overhead expenses, revenue potential and goals for six months, steps to expand customer base, marketing concepts, funding sources, etc. You can find samples of business plans online. The detailed outline of your business plan will help you to make an approximate budget for your start-up and avoid unnecessary expenses. Also, a detailed business plan will help track and evaluate the progress of your company towards the goals set.
The choice of funding sources is a matter of primary importance. Many start-ups bankrupt because they fail to repay the loans. In order to minimize your funding expenses, you need to consider several funding options. First, you need to check if the government offers many loan programs for start-ups – government offers are favorable interest rates. Second, you may browse the internet for crowdfunding. There is a great number of crowdfunding websites like Kickstarter or GoFundMe where you can seek for raising funds at a low cost for your small business.
Also, you may ask your relatives or friends to lend you some money. This is a good idea because commercial loans are more expensive. Refinancing your home can be an option as well, but this is a risky step. Try to consider each funding option carefully to avoid missing any potential source of losses, like a commission you probably didn’t take into account. If you apply for a loan, ask about the total sum of commission you will have to pay. Further, compare potential sources of funding and choose the best alternative. But Avoid funding your business with bad credit.
Budget Cutting Tips
You can always find ways to start your small business at a low cost without losses. Employ your creativity to cut expenses. The following tips will help to add efficiency to your business:
- Save on office space: you may find good deals on rent in the new buildings, rent a shared space or executive suites (mini-offices) at a low price or offer to barter your products or services to reduce rent.
- Save on equipment by buying preowned computers or laptops. If there’s an option to lease equipment, you can save money that way too. These cost-effective options are some of the little-known ways that help tighten the budget without sacrificing quality.
Save costs on staff: hire stay-at-home personnel, college students, and part-time workers. If you need help in taking orders and answering phone calls, you may hire people who can work from home or work part-time to save costs on salaries.
How to Save on Advertising?
You will need to make people aware of your products or services. Therefore, advertising is one of the most essential expense items. Most probably, when you start your business, you will not be able to invest large sums in advertising. Hence, advertising in social networks is one of the low-cost alternatives. Also, you can use mutual advertising: advertise products or services of other small businesses in exchange for them advertising your business. Another option is to print off flyers and offer promotional rates for your products or services to first customers. Printing off simple flyers will not cost a lot, but you will get a chance to tell people about your business.
Other Tips to Save
According to EduBirdie, it is important to mind your costs before taking each step in starting a new business. For example, think well if you need extra space or not. Maybe you can use your apartment or house as your office for several months. If you need additional staff, consider asking existing staff to perform additional functions. If you decide to expand, you should think if you can provide a cost-effective expansion. On the whole, think well before doing something that can potentially increase your expenses and try to find more cost-effective alternatives.