Startups need all the help they can get in terms of business financing. You’ve taken a risk starting a company, so you need to make sure everything works out. Lots of startups go under within the first year of business because they’re not financially sound.
This doesn’t always mean these businesses aren’t making money, but a combination of cash flow problems and high expenses makes it hard to profit. As such, all the sales come in and go straight back out.
For this reason, you should focus on saving money whenever possible. Instead of focusing on the big ideas, here are some small ways to save cash for your startup. When they all add up, they could lead to substantial savings on your expenses.
Move away from branded supplies
There are plenty of supplies in your business that can be bought from big brands. Things like printer cartridges or other office supplies are a great example. The big brands usually charge premium prices, but is it worth it?
Instead, you can save money by purchasing off-brand items instead. Get office supplies from non-branded companies and you avoid paying the premium price. The quality is usually very similar too – most of the time, branded supplies cost more as you’re basically paying extra for the brand name.
Rent don’t buy
Some supplies or equipment may be costlier than others. It depends on the services provided by your business, but it is usually better to rent things instead of buying them. This doesn’t apply to office supplies, but rather things like machinery, software, etc.
Buying this stuff will be very costly and can set you back a lot of money. Even worse, you may not use them all the time, so it’s a waste of cash. If you choose to rent, you’ll only pay for equipment/resources when you use them. For instance, if you don’t have a project that demands an expensive piece of equipment one week, you won’t pay for it.
This saves a lot of money throughout the year and can aid your cash flow problems. You aren’t forking over huge sums of cash to buy things and then suffering the consequences. Rent makes it easier to manage payments and work out some sort of business budget.
Use as many free trials as possible
We touched upon the idea of software in the point above, and it can be one of the biggest expenses your startup faces. You might spend hundreds of pounds on different software applications when starting out – but are you getting the most out of them?
Business software is useful and the majority of providers offer free trials. They come in two forms:
- A free trial of the full software – Here, you can use all of the software’s features for a limited time. Then, you have to pay to use it.
- A free version of the software – This gives you a totally free version of the software to try for as long as you like. The catch is that it won’t have every single feature offered by the paid versions.
Both options are excellent at helping you save money every month. You can use limited free trials to test various forms of software. For example, if you want to manage your finances, you can test both Quickbooks and Xero. Keep using as many free trials as you want until you figure out which software you get along with best. Then, when it’s time to pay for a premium version, you’ve already saved loads of money and can be confident with your choice. It saves more money by not paying for software and then realising it’s rubbish!
The second option is also very handy if you don’t need a full fleet of features. Many business software applications have extensive features that the average startup won’t need. Using a free version can help you recognise that you don’t need all of those cool features. Instead, you can get by with the free stuff, saving a tonne of money.
Outsource one or two tasks
You’ll quickly find that some tasks are hard for you to complete alone. Therefore, you need help – and employees are costly investments.
As a startup company, you’re better off outsourcing some of these difficult tasks. Paying a freelancer to complete projects or working with an agency will help you save loads of money.
In summary, startups can employ lots of small ideas to save a lot of cash. It’s important to do this during your first couple of years if you want a successful launch. Saving money helps you establish strong foundations while getting your finances under control. From here, your savings can be reinvested into your company, helping it grow and become even better. You can’t afford to splash the cash during the first two years or the chances of failure increase exponentially.