How to Save Money with a Lean Startup Budget
Startups often have one priority in mind when it comes to starting their business journey. These small companies want to innovate and grow quickly. However, as most experts will tell you if you want to grow fast, then you need to spend money on your business. Unfortunately, a limited budget means that you can’t always make big purchases up-front.
Although smaller startups will have business to help them get some of the purchases that are crucial to their growth ironed out and out of the way, they’ll still need a plan for how they’re going to use the money available to them as carefully as possible. A lean approach to startup budgeting can be a great way for companies to save some hard-earned cash when they’re scaling up. Here are our top tips for saving money on a lean budget.
1. Don’t Cut Corners on Important Things
Being frugal with your business budget doesn’t mean neglecting to spend money on crucial things. Even if you need to take on credit in order to do so. For instance, finances and branding are two of the most crucial things that your company can focus on. When you’re staying lean, it’s important not to skimp too much in these areas. Understanding your brand and investing in good branding will help you to attract long term loyal customers who can advocate for your company.
At the same time, money is the thing you need most to fuel your business, so it pays to have an expert available to help you with managing things like cash flow and financial projection. Know where you need to be willing to spend some extra money to make more cash in the long-term.
2. Hire Consultants to Save Cash
As a startup, the chances are that you won’t be able to afford all the specialist skills required in-house to get your company up and running in peak condition. Paying for professionals is expensive, but you can save some money on getting the expertise you want by investing in freelancers and consultants instead. These people only work on your business for as long as you need them to.
What’s more, if you opt for a freelance consultant, you won’t need to pay for office space for that person. Most of the time, freelancers will work from home, which saves you some cash on overheads.
3. Move As Quickly as Possible
It’s essential to think carefully about the decisions that you make as a startup, but you also need to move at a rapid pace. A lot of companies waste time and money on putting off the decisions that they know they’re going to need to make eventually. Sometimes, you’ll need to be willing to jump in and take a risk – even if it’s difficult at first.
When the pressure is on, make sure that you’re ready to be confident with your decision-making skills and stick to your guns.
4. Compare your Supply Options
Just because you have one supplier giving you all the products and materials you need for the first year that you’re in business, doesn’t mean that you’ll want to stick with that same company forever. Loyalty won’t always lead to discounts in the business world, so it might be a good idea to check out your options when it comes to other suppliers too.
If you do find a better deal from another company, let your current supplier know that you’re thinking of going elsewhere, and they might be able to match the pricing and save you some time and effort on moving elsewhere. Just make sure that you don’t take risks with your suppliers to the point where you’re dealing with lower-quality materials. You don’t want your product quality to suffer.
5. Hire the Right People Up Front
The cost of turnover is always a major drain for companies. It’s easy to staff startups with anyone who’s willing to work for you and take a low salary, but this is one of those areas where you might want to spend a little extra to get the right results. Take care to look for people with the skills and attitude that you need from day one, and you might be able to keep turnover to a minimum and start making money faster.
Remember, your staff members are also the people that are going to convince your customer to fall in love with your brand. With that in mind, hiring the right people straight away could help you to start earning a better income a lot faster.