Acquiring finance is the biggest hurdle that new businesses face. Sometimes it takes money to make money, but just how much is debatable. If you’re starting a new business based on an existing model – such as an online store or public service –there are plenty of ways to reduce your initial costs.According to Business Case Studies roughly one in three businesses in the UK fail within the first three years of trading; while only a third manage to prosper and expand. One of the biggest problems is poor management of cash flow.
If you’re starting a new business the decisions you make regarding your finances at this early stage will have a significant impact on your company’s future. These tips will help you get on the right track.
Outsource to Freelancers
Hiring freelancers can be much more cost efficient than having a full-time worker on payroll. Firstly, you’ll only hire them for as long as it takes to complete a job; and secondly, they may deliver higher quality work as they’ll be specialists in their field. When you’ve got limited funds outsourcing can seem like an unnecessary expense; however, it’ll also free up time, allowing you to concentrate on more revenue generating activities.
Download Open Source Software
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Software is essential, but it isn’t cheap. Everything from word processors to antivirus security programs comes at a substantial cost. If you’re in need of software there’s almost always an open source alternative. While they may not have the tools and features of the more well-known programs, they could provide enough options to get your operation off the ground.
Rent a Serviced Office
Committing to a long-term lease agreement can be a huge risk. In addition, if your business expands or contracts you’ll be stuck in the same space for the long haul. According to Skyline Offices the average serviced office operator will provide monthly rolling contracts and fully furnished solutions, allowing you to get set up and operating the day you sign the lease agreement.
Use Digital Resources
Office hardware can be a huge expense. Copiers, printers, scanners and computers don’t come cheap. In addition to the upfront costs, they’ll also require more storage space – which means larger premises. Digital and Cloud-based storage systems could significantly reduce these costs when you’re just getting started. There’s not much a tablet or smart phone can’t do these days; therefore, they could be a more savvy investment if paper isn’t essential to your operation.
Track Your Expenses
When you have a limited budget it’s imperative that you stay on track. Monitoring your expenses is a must. If you don’t have the time or knowledge to do it yourself, consider using an accountant or bookkeeper.
Prioritise the Essentials
This is probably the most important point of all. Before you start investing any money, make sure you have all of the essentials covered. There’ll almost certainly be a few unexpected costs along the way that you haven’t taken into account. If you find yourself out of pocket and unable to afford them when you start operating, you’ll end up back at square one.
Be smart with your finances and take this advice on board and you shouldn’t encounter any problems. Startup costs will no doubt be your biggest concern, but if you’re conscious of your numbers and always give yourself a little leeway, you’ll be in a much better position to make more financially viable investments.
Image Credit (Creative Commons): Reyner Media
