Sorting out outgoing costs is beneficial for any business but for startups it can mean the difference between surviving and failing altogether. Even if the business is doing well, keeping an eye on costs and ensuring that they’re being spent in the right areas is a great way to safeguard the business’s financial future. It’s all about spending smarter and limiting needless expenditure. Overall, startups are far more agile than traditional spending making cost reduction possible without affecting the bottom line. Below are some of the best places to start if you’d like to save some cash.
Renting office space is one of the biggest expenditures for any business. However, as a startup, ask yourself whether having a permanent office space is essential to begin. A formal setting can of course be helpful in daily operations but depending on the size of your team it may not be necessary to rent out a space immediately. Remote and flexible working greatly diminish the need for permanent office space with many workers preferring the freedom that comes with working from home or a location of their choosing. ‘What about client meetings’, you must be thinking right about now. That’s where the convince of meeting rooms to hire come in; equipped with everything you need to hold successful client meetings and located in the most convenient parts of a city, they’re the ideal solution to your issue without requiring long-term financial commitment.
The only real way to know whether your business is engaging in needless spending is through close monitoring. Quite often, due to startups having small employee numbers, spend tracking isn’t implemented comprehensively at the start and this is exactly how things spin out of control. A small expense one day can add up to a substantial budget concern at a later point. Employee expenses are another area to keep a close lid on; create a good system, it can be manual or tech-assisted, and get every employee on board for shared accountability.
Think carefully about your startup’s staffing needs before handing out job offers. This is a particularly sensitive issue but should be considered, nonetheless. Startups require people with specific knowledge and expertise, like lawyers or finance experts, but not all the time. Review your startups needs, creating a broad list of responsibilities and tasks that need to be overlooked annually and reference with the employees you’ll require. If you only need someone to do taxes a few times a year, then it may be more cost-effective to work with a contractor; the same can apply to other parts of your business. Cost-cutting should never come at the expense of work quality so if your list says that you always need a lawyer on staff, don’t be tempted to skirt the issue.
Getting a business up and running is always going to be expensive. As a startup, however, you have the agility and freedom to make processes work for you by thinking outside the box and stripping back standard issue ‘essentials’. Thinking creatively and doing the sums before committing to any contracts, as well as taking advantage of remote working possibilities, can help you save and forge your own path to success.