Starting a business is a dream for many people, but the cost alone proves off-putting to many. Coupled with that is the time investment it’ll need, which could take away from your family life more than you’d think, especially when juggling your startup with a job and family.
There are more than a few ways to work around all of this, however. Figuring out how to save money when you’re starting a business, for example, helps much more than you could expect. Not only could it make doing it more affordable, but it could be more within your grasp than you think.
If you’ve had that entrepreneurial itch for quite some time, then figuring out how to afford your business will be vital. Making it more affordable and using some money-saving tips could be a priority, with there being multiple ways to do so.
How Much Does It Cost To Start A Business?
Before you can start figuring out how to save money when you’re starting a business, you’ll need to know what kind of costs you’ll need to pay. There are more than a few startup costs you’ll need to be aware of, with many of these being mandatory, including:
- Obtaining Licenses & Permits
- Paying Insurance
- Suppliers
- Employees
- Marketing
There can be multiple other startup costs that you’ll need to pay for, each of which can vary from company to company. You’ll need to have a rough estimate of how much this will cost you. Spending quite a bit of time researching this will help you generate a rough estimate for how much it’ll cost you.
Once you have that, you can start figuring out how to reduce this. If you’re starting a home-based business – which can be highly recommended – you can expect it to cost anywhere between $2,000 and $5,000. A microbusiness can cost $3,000 or smaller.
If you’re starting a brick and mortar business, these costs will skyrocket, as you’ll need to consider premises and rent, among other expenses. When you’re putting these costs together, it’s best not to underestimate them. Doing so could throw your budget out of whack and running out of money quite quickly.
It’s best to overestimate them and plan accordingly. Once you do, you can start using a few money-saving tips that’ll help you save money as you start your business.
How To Save Money When You’re Starting A Business: 5 Money-Saving Tips
1. Automate Your Processes
From your payroll process to paying taxes and scheduling employees, you’ll have quite a few processes to oversee. Many of these can be time-consuming, but there are ways to minimize how much time and effort you spend on them. Automating them is recommended.
While this doesn’t focus solely on saving money, it saves time, which can then be used to focus on tasks that save or bring in money. It predominantly saves you labor hours and the associated costs.
Though this entails spending a bit of money on the automation tools, it’ll save you much more money in labor costs and time. It also means that you don’t need to spend much time on any time-consuming duties.
2. Get Sponsorship For Events
Event-based marketing can be an effective strategy for more than a few companies, but it’s not the most affordable one to engage in. It lets you engage with potential customers while showing off more of your product or service. When you’re throwing these events, they can be quite expensive.
That doesn’t mean you’re the only one who has to pay for these galas, seminars, and similar events. Getting sponsors, whenever appropriate, can be highly recommended, as it reduces the overall costs of these events quite significantly. The sponsors get their brand in front of potential customers while you save money and do the same.
You’ll need to be careful not to do this with your competitors, however. Instead, focus on partnering with companies in related fields that compliment your business. Food suppliers, for example, can be recommended if you want food at the event.
You could even trade services instead of making it a financial exchange.
3. Choose Low-Cost Marketing Strategies
When you first start a business, marketing can be one of your largest expenses, as you’ll need to start gaining traction with customers. That doesn’t mean you’ll need to spend a significant amount of money on it, however. Digital marketing can be much more affordable than you’d expect.
That’s especially true when compared to traditional techniques, such as billboards and television ads. They’re also much more analytics-focused, as you can see precisely how they’re performing and adjust your marketing spend accordingly.
There are more than a few affordable digital marketing strategies to choose from, including:
- Email Marketing
- Content Marketing
- Search Engine Optimization
- Social Media Marketing
- Influencer Marketing
With the above, you shouldn’t have a problem starting to gain traction and visibility without spending too much. While they’ll still involve a cost, it’ll be minimal compared to many other strategies.
4. Outsource What You Can
While employees can be vital to the success of a business, they’re also one of your largest expenses. In many cases, it can be the largest cost of running a business. Minimizing this as much as possible is vital, but that doesn’t mean doing everything you can to do so.
Offering low wages and unattractive employment benefits isn’t recommended, as this will only draw in low-quality workers. Instead of this, consider outsourcing as many of the roles you need filled as possible. Doing so lowers your costs more than you could think.
In many cases, you can outsource to an entire team for the cost of one full-time employee. Then there are the related expenses you can save, such as health insurance, worker’s compensation, and even office space. You can outsource more than a few areas, including:
- Marketing
- Sales
- Human Resources
- Website Development
- Customer Service
By outsourcing, you can save much more than you’d think.
5. Embrace Telecommuting
Speaking of business practices that may not have been standard, telecommuting has become increasingly popular in recent years. While this isn’t possible for all employees, it is for more than a few. All of the independent contractors you outsource to can work this way, too.
Taking this approach offers more than a few benefits, such as less office space being needed and lower utilities. As a result, your overall business expenses will drop because of this. While you might need to pay for software and similar purchases to make sure your telecommuting employees can work properly, these costs will be minimal compared to office rent.
Getting this software, such as collaboration tools, will make sure your employees can stay as productive as possible when they’re working from home. There are more than a few benefits to taking this approach, with virtually no drawbacks. If you can go fully-remote, then it’ll remove the need for office space and similar expenses completely.
How To Save Money When You’re Starting A Business: Wrapping Up
There’s no reason not to use them when you’re starting a business.
