Starting a new business has a lot of initial challenges, chief among them being expenses. But, some of these expenses can and should be avoided.
When starting a business, prioritizing what you need is essential. Yes, there will be startup costs, but it’s important for you to identify when an investment is overstretching your budget. In the initial stages of development, this is one of the easiest ways cripple your business. To help you efficiently allocate funding, here are some tips on how you can avoid some of these unnecessary costs from the start.
Office Space
When starting a business, people usually picture the shiny new office, cubicles, and a spacious conference room. Yet this ideal image can be a pitfall for overspending. Office rent is one of the main expenses when it comes to owning and operating a business, but ask yourself if you even need a central office to work out of.
If your business is internet-based, you could work from home or gather your team in cafes, libraries, or other public areas to work. As long as your internet is secured, you can work anywhere while you save money to rent an office space. However, if you do need an office space or work location, be sure to assess whether your initial budget will cover the rent. Don’t worry about a lavish office, focus on a presentable and safe space to start out with. This will allow you to save money and build revenue for you to have more options for an office upgrade in the future.
Equipment
Equipment is another tricky expense category because some businesses will require more specialized equipment than others. The way to avoid expenses here is to establish what tools are absolutely crucial and what equipment is secondary. Does your office need a projector screen? Does your bakery need TV for customers? Be mindful of what is crucial for you to have that enables you to deliver excellent products and services to your clients. These are the tools you need to have; the others are not as important.
Remember, you can always add additional equipment or features to your business, but if you’re spending more than you have or more than you are recovering in revenue, you’ll ultimately lose money. Starting a business is like building a solid structure. Start with your base, then build from there. You don’t to have everything your business needs immediately. The goal should be to get a start and let your new income help pay for the rest as you go!
Staffing
Staffing can make or break you. An employee is an investment, someone who will help you achieve the vision for your business. Choosing the wrong staff members, or even too many, will significantly drain your start-up budget. Small businesses use small teams, hire only a few team members to fill functions you know you’ll need to begin with. While you don’t want to over-extend yourself, starting out with more staff members than there is work to do will just mean that you’re not getting a full return on your investment.
Avoid expenses first by choosing the right people to work for you. Check their credentials and interview them thoroughly. Make sure the personalities and work ethics of candidates align with what you need. Remember, you can always expand. Start with the staff that you need to make money. When you have steady work, then consider bringing on more people.
Shipping
You may need to rely on shipping to deliver goods to clients. Be sure to shop around for good deals that will align with your budget and ensure the safe delivery of items to your hard-won clients. Another consideration is for your or staff to deliver products personally. If you have a sales staff-member, or are going to a meeting, make the delivery in-house and avoid shipping costs all together. This way you can also give a personal touch to your business and grow the professional relationships you have with clients.
