Some businesses require a significant level of investment to get up and running but it’s certainly possible to start a new business with a smaller budget. In fact, there are plenty of ways to reduce costs so that your new startup venture doesn’t overstretch your budget.
If you’re keen to start a budget-friendly new business, take a look at our top tips and find out how you can reduce your outgoings and save money.
Do the admin yourself
Depending on the type of business you’re starting, you may need complete various registration forms. As well as registering your business, you may need to incorporate a company or establish sole ownership of an LLC, for example.
Often, people rely on specialists and lawyers to complete these tasks for them but there is plenty of information available online. In fact, the IRS issues guides specifically designed to help new business owners meet their obligations.
If you’re setting up a relatively straightforward business, consider doing the admin yourself or using a mentor who can provide the assistance you need at a reduced cost.
For all companies, the wage bill will be one of the largest outgoings and it can quickly drain your budget. If you need help to set up the operational aspect of your business, consider using subcontractors instead of employees.
When you use freelancers, you don’t have to employ them on a permanent basis so you aren’t required to pay a salary. Instead, you can arrange payment on a task-basis. Whilst you may not necessarily have access to the constant support provided by employees, freelancers can deliver great work and reduce your expenses considerably.
If you need equipment for the success of your business, consider whether it would be more cost-effective to buy second-hand, rather than new. You may need a computer or laptop, for example, but does it really need to be the latest model? If not, it’s likely that a second-hand model will provide everything you need at a fraction of the cost of a newer model.
Alternatively, see if renting or leasing equipment would be a viable option for your business. This can reduce capital expenditure in the early years, allowing you to invest this money elsewhere. As your revenue begins to grow, you can explore the option of buying the equipment you need outright.
Reduce your personal expenses
Before you start your new venture, save as much money as you can and be prepared to go without luxuries for a while. Often, business owners are the lowest paid employees when they’re starting a new venture and many don’t take a wage from the company at all.
By reducing your own personal costs, you can minimize the amount you’re taking out of the business. As a result, the business has more capital and cash flow, which can make it easier to get off the ground. If you can reduce your mortgage, move to a small property or even move in with family while you launch your business, you could avoid having to take a wage from the company at all and save a considerable amount of money each month.
Find the right office space
Starting a business on a budget doesn’t mean you have to forego the necessities. You’ll need somewhere to work, but you don’t have to commit to a long-term lease. Explore budget-friendly rentals, like Bond Collective – Shared Office Space and Coworking, to see how you can access professional and well-appointed office space without exceeding your budget.
Similarly, if you need a warehouse to store goods or a workshop for production, explore your options before you commit to anything. There are good deals to be had so you don’t necessarily need to take the first industrial unit you’re shown. Instead, spread the word about what you’re looking for and don’t bother paying for space you don’t need.
Starting any type of business can be difficult but working to a tight budget can make things a little more complex for the best of people. However, launching a new business on a smaller budget puts you in a great mindset. By focusing on the financial needs of the business straight away, minimizing outgoings and only spending on essentials, you’ll set yourself up for a lifetime of reducing costs, improving turnover and profit-building. With this in mind, view your budget-friendly startup as the best way to practice the skills you’ll need in order to run a successful and profitable company in the long-term. You can do it!