One of the biggest challenges when starting a business is getting the money together to cover everything. Once you start planning, it can be hard to see how others manage to start their business. Do you need years’ worth of savings? Do you need to take out huge loans to cover the costs? A lot of the time, you can save money as a business owner with a few simple tricks, and missing out on them can cost you a fortune.
If there’s one thing that every startup business needs, it’s someone with the skills necessary to run a business efficiently. Small businesses can’t afford to waste, especially if you’re starting on a limited budget. You need money management skills as a bare minimum.
Money management skills
If you’re going to manage your own finances, and the finances of your business effectively, then you need to be able to properly organize them. A lot of small business owners might think it’s okay to mix their personal finances with their business income – but you’ll find that that can become messy quickly. You need to be able to effectively separate the income and costs of your business, from the incoming and outgoing exchanges of your own account.
Having a separate account for your business makes it simple to organize it into an easy-to-read format, and you won’t waste any time picking out things that you’ve fought throughout the week. Using this data in a cash flow forecast, for example, can give you a better idea of how much you should be spending, and where you should be cutting down.
Before you start your business, you should practice this with your own money. The sooner you get a grip on effective money management skills, the better. Your business will be rewarded for it, and you’re much more likely to see success. Trying to learn this while your business is struggling can put too much pressure on you.
Knowing what you want and need for your business is highly important if you’re going to save money. For example, if you’re going to need commercial office furniture, knowing to buy it in bulk could save you money. Rather than buying some here and there, bulk purchases from certain companies may give you a percentage discount on a large purchase.
You can often save money on bulk purchases, but the problem is knowing what you’ll need and when you’ll need it. While you might have the money to bulk buy everything early on, it’s not always the best decision if you need space, or money to fall back on. Plan your purchases properly, and be realistic with how much you’re going to need whenever you make an order.
If your business is selling perishable products, like food items, then bulk buying can present itself as a problem. You need to know how much you’re going to sell on average before you make such big purchases and may end up losing some of that discount early on. However, it’s better to miss out on a discount than waste money on products that didn’t sell in time.
Using free resources
As a small business owner, cheap and free resources should be your priority. If there’s something you can get for free, then you should try to avoid paying for alternatives as much as possible. That’s not to say that free is always better, but it can help you to cut costs where you don’t necessarily need to be spending. Of course, not everything can be done for free, but consider things like marketing.
Social media marketing can be free in a sense. Of course, there’s a lot of work that goes into social media marketing, and at some point, you will have to invest in it if you want it to be successful – but as a small business owner, your main concern should be growing your follower base. Almost every business is making the most of social media these days and for a good reason. It’s a great place to grow recognition, and you don’t have to make everything about your business. In fact, it’s almost better if you keep promotions to a minimum.
You’ll see larger brands having their social media accounts run by individuals who can connect with their audience, and it can help to bridge that gap between your target audience and your brand. It’s better to approach it like that, rather than constantly spamming advertisements – because that will just push your audience away. Not only that, advertisements can cost money and time to make, so you would be saving money there.
Other aspects of marketing can be made cheaper, too. For example, having to put together a video or piece of media to market your business might sound out of your expertise. A lot of small businesses would pay other companies to handle this – but you don’t need to. There are plenty of apps out there that for a small charge, offer you their easy-to-use tools and asset library to create professional-looking marketing videos for your business.
Learn from your competitors
You don’t need to learn every lesson yourself, that’s not at all cost-effective. While it’s great to be hands-on, you should learn everything you can from what your competitors are doing. Competition can make times difficult for your business, but it can also make your life easier as a business owner. Did your competitors try a new approach to customer service and it didn’t work? Now you know what to avoid. Did your competitors introduce a new product that didn’t sell? You can cross that off your list.
Competing with other businesses can provide more opportunities than challenges if you’re paying attention, so always take the free lessons that other businesses can teach.
Apply for a grant
Even if you can afford to start your business, spending all of the money you have on that start isn’t always the best option. Instead, you might be able to get your hands on a grant. If you’re granted a sum of money to get things off of the ground, you’ve then got some of your own money to fall back on. Of course, the eligibility of your grant can vary from business to business, but it’s worth seeing if your business can get one.
Eliminate unnecessary spending
While you’re just getting your business started, it can inspire you to feel ambitious, which could lead to the unnecessary money spending. Being realistic is essential when it comes to running a successful business, so it’s important that you don’t try to overshoot or overreach what’s achievable to you. Having great money management skills can help to ensure you’re not overspending, and it’s something that you should keep in mind all throughout the growth of your business.
In some cases, it may even be worth investing in an accountant to help you to see where you’re going wrong. Often, accountants aren’t hired full-time but outsourced – in which they visit your place of business routinely to ensure everything is as it should be.
Remote work is something that’s growing more and more popular as the years go on and for good reason. Of course, it’s not perfect for every business model, as some will need a brick-and-mortar storefront – but when it comes to office work, you could be saving heaps of money with remote work. Not only are you eliminating the costs of an office, but you’re also saving that daily expense of commuting to and from work.