8 Tips for Saving Money When Starting a Business
Guest Written by Julie Morris
You can't start a business without spending money, but that doesn't mean you need to bankrupt yourself to get your business off the ground. If you’re smart about it, you can save money on a wide range of business essentials. With that in mind, here are eight ways entrepreneurs can reduce their business start-up costs.
Save Up Before Starting Your Business
Most business owners use financing to start their business. However, the more loans you take on, the more you'll pay in the long run due to interest rates. By saving money before starting your business, you reduce the amount of financing required.
Cut Supply Costs
Setting up an office is a costly endeavor. Not only do business owners face overhead costs for rent and utilities, but they also need to purchase all the supplies and equipment needed to run their business. In addition to shopping for the lowest prices, business owners should search for special deals and promo codes for major retailer such as Office Depot, which can especially help you save money if you buy your supplies in bulk.
Cut Software Costs
Licensing software gets expensive fast, especially if your preferred software operates on a subscription model. Substitute expensive software with free, open source options whenever possible. Office software is one easy swap businesses can make; rather than paying monthly fees for Microsoft Office or similar, opt for LibreOffice, Freeoffice, or another no-cost alternative. If you decide to purchase high-end software for your company, make use of companies like RetailMeNot to help keep those costs as low as possible.
Know Your Staffing Needs
As a general rule, the business owner isn't the best person to handle administrative and operational duties. Because your time has a high dollar value, your energy should be spent on high-level work while other tasks are delegated to more affordable labor. However, hiring full-time employees is expensive. If you offer noncompetitive wages to cut costs, you'll get what you pay for. Jobs that don't require a high level of skill or full-time staff can be outsourced to save on payroll costs. Neil Patel explains how to determine which tasks your business should outsource. Companies can hire freelancers or work with a staffing agency. When full-time staff is needed, hire the best workers you can afford and invest in employee retention.
Make Use of Technology
Some work can be outsourced to technology rather than people. In some cases, a task can be automated completely. In others, technology can significantly shorten the time required for a task so you can add it to existing staff's duties rather than hiring more people. Infusionsoft lists 25 tasks to automate along with practical solutions for doing so.
Watch Energy Usage
Energy bills for your office are an unavoidable cost of doing business, but that doesn't mean there's no room for savings. To reduce energy costs, choose an office location that receives ample natural light, opt for energy-efficient fixtures like LED lighting and ENERGY STAR office equipment, and install programmable thermostats and motion-activated lighting so you only use energy when it's needed. If you've taken these steps and your energy bills still seem high, schedule an energy audit with your utility company. Additionally, because of energy deregulation your can choose your energy provider, savings money and even using renewable energy in some cases.
Hire a Tax Professional and Bookkeeper
Doing your own tax prep might save money over hiring a professional, but there's a good chance you'll pay more in taxes without the guidance of a CPA. Because tax professionals understand the many deductions available to business owners, they help your business minimize its tax burden and avoid costly, time-consuming audits. Tax preparation fees are also a deductible business expense.
Hiring a bookkeeper or CFO for hire service may also help. Companies such as Synergy Accounting will not only take some of the workload you shouldn’t be bothering with, they will give you a better idea of how your stand financially. You don’t know what you don’t know. A certified accountant can help you measure your profits and losses and help you make better decisions about money.
Individually, these tips don’t offer enormous savings for a small business owner. However, when used together, they add up to a big reduction in the cost of starting and running your business. And when it costs less to run your business, you’ll enjoy higher profit margins and a better chance at long-term success.
Guest post by Julie Morris. Julie is a life and career coach. She thrives on helping others live their best lives. It’s easy for her to relate to clients who feel run over by life because she’s been there. After years in a successful (but unfulfilling) career in finance, Julie busted out of the corner office that had become her prison. Today, she is fulfilled by helping busy professionals like her past self get the clarity they need in order to live inspired lives that fill more than just their bank accounts. When Julie isn’t working with clients, she enjoys writing and is currently working on her first book. She also loves spending time outdoors and getting lost in a good book. VIsit her site at juliemorris.org
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